Cohen Law Office
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Do you believe that a trustee is stealing assets from the trust?

Those with significant assets, large families or a desire for a specific legacy often put a lot of effort into creating an estate plan. Deciding how to divide assets and allocating them to the right people is an important step toward creating a legacy that people remember someone by.

Unfortunately, it is often a complicated process. The more assets an individual has to leave behind, the more likely their family members, loved ones and heirs are to squabble over the assets. Creating a trust is often a perfect solution for those with significant assets and complicated wishes. The trust creator can designate someone to serve as trustee to carry out their wishes and administer the trust.

This individual will have control over the assets of the trust and will ensure that each disbursement from the assets adheres to the rules within the trust. Unfortunately, not all trustees live up to the obligations of their position. Some people in control of significant assets may find incentive to steal those assets for personal gain.

Trustees must act in the best interests of the trust, not themselves

A trustee holds the position of respect and trust. This individual has a fiduciary duty to the creator of the trust, as well as its beneficiaries, to make decisions in the best interest of the trust. A trustee may need to invest money, liquidate or purchase assets, administer business affairs and ensure that all trust activity complies with the rules within the trust.

That is a significant amount of work, for which it is common for the testator or trust creator to leave some amount of compensation. However, that compensation may be a pittance compared with the overall value of the trust.

With minimal oversight unless someone steps in, a trustee may feel like they can get away with embezzling money from the trust. They could also attempt to sell or transfer assets in a manner that will benefit them, rather than the beneficiaries of the trust. When that happens, the beneficiaries of the trust can take action against the trustee.

Challenging a trustee is not the same as challenging the trust itself

Many people are loathe to challenge the estate plan or trust left behind by a loved one. However, it is important to differentiate between challenging the actual wishes of your loved one and challenging how someone executes those wishes.

You can ask the courts to review a trustee's behavior without taking steps to invalidate the trust or the estate plan as it stands. If a loved one named you as a beneficiary for a trust, they, obviously, intended for their legacy to impact you. If you believe that a trustee is diminishing that legacy, you may want to speak with an estate administration and trust attorney who can advise you about the issue.

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The Cohen Law Offices, PC
1720 S. Amphlett Blvd.
Suite 258
San Mateo, CA 94402

Phone: 650-517-6133
Fax: 650-592-2019
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