Trusts can be complex instruments involving significant assets, numerous beneficiaries, the instructions of the grantor, and the appointment of a trustee to manage the trust. In most cases, the trustee is a person or institution that is responsible with the handling of the trust funds and communicates regularly with the beneficiaries of the trust about the health of the trust. However, in some situations, the trustee might not be upfront or honest about the state of the trust and misrepresenting important details about the trust account to the beneficiaries. If you believe that this is happening to you, it is critical that you speak with an experienced trusts and estates attorney right away. At The Inheritance Recovery Attorneys, our office is skilled at identifying when a trustee is misrepresenting the trust and will protect your rights as a beneficiary. Call or contact us today to learn more.
Trustee Fiduciary Duty
A trustee owes a fiduciary duty to the grantor of the trust and the beneficiaries to manage the trust according to the wishes of the grantor and in the best interests of the beneficiaries. When a trustee fails in these charges, he or she can be found in breach of fiduciary duty. Misrepresentation falls under the scope of a breach of fiduciary duty and can happen in a number of ways.
The most common reason why a trustee will misrepresent the trust to beneficiaries is because the trustee is deriving personal gain from the trust. A trustee is not allowed to personally gain from a trust being managed for the benefit of others. Some of the most common examples of using a trust for personal gain include mingling personal and trust assets, conflicts of interests like investing in companies that the trustee owns a stake in, or failing to prevent a co-trustee or other party from benefitting personally from the trust.
Another common reason for misrepresentation of a trust by a trustee is because of negligence and mismanagement. If a trustee fails to properly administer the trustee or manage the trust assets properly, the trust can lose value for the beneficiaries. When a loss occurs because of mismanagement or negligence sometimes a trustee will try and misrepresent the value in order to avoid getting in trouble for a fiduciary breach. It can be difficult to prove a misrepresentation by a trustee, which is why it is important to hire a quality attorney to handle your case.
What to do if You Suspect Misrepresentation
If you suspect that the trustee of your trust is misrepresenting the assets, value, or terms to you or other beneficiaries the first thing you should do is demand an accounting of the trust. A trustee is required to keep detailed records of income, payments, investments, and all other actions pertaining to the trust. If the trustee fails or refuses to give an accounting of the trust, you need an experienced estates and trusts attorney to use the courts to force the trustee’s hand.
A knowledgeable attorney can petition the court for an accounting of the trust by the trustee. If misrepresentation is strongly suspected or proven after an accounting of the trust, the next step in the process is the removal of the trustee. Courts can be reluctant to remove a trustee, which is why it is critical that you have an attorney with experience in trustee removal cases. Your attorney will be able to build the best possible arguments for how the trustee in your case misrepresented material facts about the trust and why the trustee should be removed from further management of the trust assets.
If it can be proven that in the misrepresentation of the trust the trustee personally gained or lost value for the beneficiaries, a civil lawsuit can also be brought against the trustee for damages. A trustee can be forced to divest their ill-gotten earnings and be held responsible for any losses incurred due to mismanagement, negligence, or fraud. A skilled trusts and estates attorney will be able to review the facts of your case and advise you on what can be done if you suspect misrepresentation by your trustee.
Call or Contact Our Office Now
Proving misrepresentation by a trustee can be a lengthy and complex process, so if you suspect that your trustee is breaching his or her fiduciary duty, the time to act is now. Call the office or contact us today in southern California at The Inheritance Recovery Attorneys to schedule a consultation of your case with one of our highly qualified estates and trusts attorneys now.