If you are a trust beneficiary, you expect the trustee to always act in your best interests when managing the trust. After all, they are legally obligated to do so as they owe you a fiduciary duty.
So, what happens in a case where the trustee wastes or steals the trust assets? Is there anything you can do about it? Here is what you need to know.
You can sue the trustee for breach of fiduciary duty
The trustee is in charge of administering the trust assets, but they must follow the law when doing so. They must exercise reasonable care when managing the trust assets and always act in a way that prioritizes the beneficiaries’ interests.
A trustee cannot act to benefit themselves at the expense of the beneficiaries. Otherwise, it’s a breach of the duty owed to you, and they can be held legally liable. For instance, if a trustee transfers property under the trust to themselves or pays personal expenses with the trust funds, they can be ordered to return or pay back the missing assets.
Do not delay taking action
If you notice anomalies with transactions involving the trust, it is crucial to get to the bottom of it with some urgency. The more you delay taking action against the misappropriation of assets, the harder it may be to recover them.
Having evidence to back your claims is perhaps the most important bit. Provide financial records, bank statements, title searches and other related documentation because the court will not listen to allegations made in bad faith
Ultimately, knowing the legal procedures you need to follow, and other steps to take in protecting the trust against a rogue trustee can save you a lot of money and help you protect your interests.