Trustee Accounting

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Help! My Trustee Is A Fraud!

Help! My Trustee Is A Fraud!

 

HELP!  MY TRUSTEE IS A FRAUD! 

               Trustee’s should be trusted, but are not always trustworthy.  In fact, it’s unfortunately not uncommon for a chosen trustee of a trust to be acting fraudulently or in a manner which is not in line with their powers and duties as trustee.  As an inheritance attorney St. Peters, I often get frantic calls from beneficiaries in this situation.

If I believe there is malfeasance by a Missouri trustee, I will either file litigation or send a demand letter seeking information related to the trust.

I’m A Trust Beneficiary, What Rights Do I Have?

Remember, if you are a beneficiary, you are entitled first and foremost to a copy of the trust.

Second, you are entitled as a beneficiary to an accounting or reporting of trust activities from the trustee.  How often depends on the terms of the trust, but this is a common area where trustees engage in improper behavior:  they don’t keep beneficiaries informed of what’s going on with the trust assets.

I’m often surprised at how long clients will endure the lack of information from a trustee.  In some cases in can be months, but it’s just as often years.  Years of excuses or non-responses from a trustee.

In these cases, you must take action.  You must hire an experienced inheritance attorney, St. Peters, Missouri to decide the best course of action.  In some cases, it’s best just to file litigation right away, assuming there is a colorable claim of malfeasance by the trustee.  Examples would be not responding to communications from a beneficiary, not providing the accounting, or misappropriation of trust funds or some combination or all of these things.

If your trustee is supposed to be sending you money every month and suddenly is jetsetting around the world, there’s almost definitely something wrong.

Okay, I’ve Got A Lawyer, What’s Next?

If there’s misconduct by the trustee, the course of action is usually to file litigation, often in an expedited procedure called an injunction hearing.  The idea with an injunction hearing is you have enough information of bad conduct that your attorney can show a likelihood of success in the pending lawsuit, but you need immediate action to stop any bad conduct.  From there, the court can demand that the trustee account within a certain amount of time, temporarily remove the trustee and appoint someone else or take other action.  The point here is that you have to show an emergent situation.

Ultimately, the goal would be to permanently remove a bad acting trustee, obtain a damage award for misconduct, save assets from being wasted and track down where trust funds went.

Can I Get My Attorney’s Fees Paid For?

This is a common question from beneficiaries in this situation and I’m completely sympathetic to it.

The answer is it depends.

The court has discretion to award fees, and often will if the beneficiary is successful.  Now, the problem from where do those funds get paid back?  Well, bad acting trustees usually don’t take money from a trust because they want to invest it in gold.  They usually have blown through at least part of the money and getting money back after a judgment is obtained is a completely new ball of wax.

Conclusion

In lieu of that, or often in addition, the beneficiary can usually be paid for out of the trust proceeds, if there are adequate funds left.  This would almost certainly be the case where there are other beneficiaries who have benefitted from the litigation.  In that case, the judge might apportion the fees to be paid on a pro rata basis among the beneficiaries, most likely from their portion of the trust.

A final piece of advice:  It’s 2018.  Most attorneys practice in a couple of practice areas.  Some still practice in many.  This situation, however, requires a specialist in probate litigation.  Knowledge of the judges, special procedures in particular probate divisions in different counties and the law, most importantly, is really an advantage.  A divorce lawyer who just happens to be a nice guy and your friend shouldn’t be your counsel in this type of case.  Hire someone with experience and make sure that they can back up their experience when you meet with them.