June 30th, 2023 in
As a trustee, you have many duties and responsibilities, not the least of which is a fiduciary duty to the trust’s beneficiaries. A trustee must always have the best interests of the beneficiaries in mind when executing the terms of the trust, acting prudently, and ensuring the trust assets are appropriately protected. There are times, however, when the beneficiaries of a trust may bring allegations against you as the trustee. These allegations often stem from an heir who wants their inheritance now and is looking for someone to blame when it does not happen immediately.
Of course, there are legitimate reasons that a beneficiary may make allegations against a trustee and even file a motion in court to have the trustee removed. However, whether the allegations made against you have any basis in fact or not, it is imperative that you speak to a knowledgeable attorney from Steburg Law Firm to ensure the best trustee defense in California. Our firm has extensive experience in estate planning and are highly skilled litigators. If you are a trustee accused of wrongdoing, Steburg Law Firm can help. Learn more about common reasons why trustees are sued, and the answers to other frequently asked questions.
What Are the Most Common Reasons Trustees Are Sued?
When a trustee acts with negligence or incompetence while performing the duties and responsibilities of a trustee, trustee misconduct may be alleged. There are many rules in California regarding how trustees must conduct themselves while carrying out their duties, including always acting in the best interests of the beneficiaries while acting in good faith. Deviations in the rules can significantly result in personal liability for you as trustee if your decisions adversely affect the trust beneficiaries. The most common reasons trustees are sued or a motion is filed to have the trustee removed include:
- Theft or misappropriation of trust properties by the trustee
- Incompetence on the part of the trustee in managing the trust
- Commingling of trustee assets with the assets of the trust
- Showing favoritism to one beneficiary over the others
- Collusion with one or more beneficiaries to the detriment of others or collusion with a third party to the detriment of all beneficiaries
- The trustee’s failure to provide a copy of the trust to beneficiaries and keep beneficiaries consistently updated on the progress of asset dispensation
- Fraud on the part of the trustee
The issue can be even more complex if the trustee is also a beneficiary. For example, California law allows for trustee removal on the basis of breach of fiduciary duty, as well as the removal of a trustee for being unfit to administer the trust, when co-trustees cannot cooperate, when a trustee’s compensation is excessive, or when the trustee is insolvent.
What Are the Possible Resolutions to Trustee Disputes?
Serious trustee disputes may need to be resolved in court or through an Alternative Dispute Resolution method. When ADR is used, both parties agree to be bound by the decision of an impartial, independent third party. Depending on the situation, when a trustee is accused of mismanagement of the trust, and there is sufficient evidence to back up those accusations, the trustee may be removed from their position, with a replacement chosen by the court. Alternatively, the judge may order what is known as a constructive trust, which is meant to counteract the trustee’s initial mismanagement of the trust. If the court finds a trustee used trust assets for their own personal benefit, the trustee could be held liable and ordered to reimburse the trust beneficiaries fully. If the court finds no wrongdoing on the trustee’s part, the trustee will return to their duties as outlined under the trust document.
How the Steburg Law Firm Can Assist With Your Trustee Defense in California
Perhaps you are doing your best to administer a trust—yet the beneficiaries are unhappy with how you do your job. The beneficiaries may even have filed a motion with the court to remove you as trustee. If this should occur, immediate, effective legal representation from Steburg Law Firm is essential. The Steburg Law Firm offers the most comprehensive trustee defense in California. We can explain your options, answer all your questions, and help you maneuver through the complexities of court involvement in the best way possible.
When you set up a consultation with Steburg Law Firm to discuss your trustee defense case, our team has the experience to offer you the appropriate guidance—the trust administration attorneys at the Steburg Law Firm. Allegations of wrongdoing against a trustee are severe—you could even be personally liable. Don’t wait! Consult Steburg Law Firm attorneys Anita Steburg and Anam Hasan to mitigate the risks you are facing.