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Living Trust Problem Trustees and Trust Accountings

On Behalf of | Dec 17, 2018 | Trust Disputes

Buffington Law Firm’s trust dispute attorneys have been asked to solve many problems relating to misbehaving problem successor-trustees of revocable or “living” trusts.  One of the most common problems with trusts once the trustors die and a successor-trustee takes over is the way successor-trustees sometimes handle trust money.  Since living trusts “avoid probate,” they are ordinarily not under the supervision of the Superior Court.  While avoiding probate is often touted as a benefit of living trusts, it can also lead to problems with successor-trustees and the way they handle the trust money and assets.

There are many forms of financial misbehavior that misbehaving successor-trustees sometimes engage in.  Not uncommonly, successor-trustees charge personal expenses to the trust, using trust moneys to fund travel and entertainment that they claim was necessary for “trust business.”  Another common issue is trustees simply paying their personal expenses from the trust.  Unequal distributions to beneficiaries when the trust states that distributions are supposed to be equal is another common problem.  Trustees often misappropriate the deceased trustor’s personal items for him or her self and never account to the other beneficiaries for these.  One characteristic that misbehaving successor-trustees usually share is that they fail to account to the beneficiaries for what they are doing with trust assets and moneys.  This is almost invariably a “red flag” danger sign.

When this situation appears to be occurring, the beneficiaries have a remedy.  The California Probate Code allows beneficiaries to demand an accounting from the successor-trustee under most circumstances.  The probate code is very specific as to the details of the accounting, and suffice to say that a probate code compliant accounting usually reveals whether there are problems with the trustee’s handling of trust assets.  Generally, trustees are required to account at least annually, or upon a change of trustees.  Even in trusts which (unwisely in our opinion) state that a successor-trustee does not have to account, upon petition to the Court our trust litigation attorneys can almost always obtain a court order requiring the trustee to provide an accounting.

The California Probate Code provides for penalties to successor-trustees who mishandle trust moneys and assets.  The first step in the process of holding a trustee accountable is to compel an accounting.  Our trust dispute attorneys have a track record of success in this process.  Generally, once this process begins the trustee will negotiate to make good on improper uses of funds.  If not, we move towards causing the Court to hold the successor-trustee accountable.  If necessary, we can often cause the Court to remove and replace the problem successor-trustee.

If you are involved with a California living trust in which you suspect financial misbehavior by a trustee, you need legal counsel.  We invite you to contact Buffington Law Firm’s trust dispute attorneys for a free legal consultation. All calls are handled by actual experienced trust dispute attorneys, are completely confidential, and there is no obligation.