Establishing a trust is an important part of an estate plan because it lets the creator dictate exactly what they want to happen. Part of establishing the trust is naming a trustee. This person is responsible for taking care of the contents of the trust and making sure that it’s handled in the correct manner.
One thing that a trustee must do is act in the best interests of the beneficiaries of the trust. They can never something because it will benefit them.
When is there a conflict of interest?
A conflict of interest usually occurs when the trustee has a personal situation that impacts their ability to make solid decisions about the trust. There are several ways this can happen. For example, the trustee’s family member might be interested in a property contained in the trust. If they opt to sell the property for less than the fair market value or if the property shouldn’t be sold, they’ve misused their position for personal gain.
Conflicts of interest aren’t always blatantly obvious. Watching the behavior of the trustee and what they’re doing with the trust can signal when something is amiss. Their fiduciary responsibility is always to the trust. If they can’t meet that responsibility, they should step down as trustee.
Anyone who has a reason to believe that a trustee has a conflict of interest should explore their legal options. Discussing your case with someone who can help you to figure out the best course of action can help you to resolve things. Don’t waste time because there are limits to how long you have to act. Plus, the trustee can do much more damage to the trust if they’re allowed to continue unchecked.