How To Respond To A Misappropriation Of A Trust


With a trust, the trust funds are controlled by a trustee. The trustee is then expected to distribute trust funds in a specific way. However, one problem that often emerges is the misappropriation of trust funds. This is a punishable offense, and you will need help from a trust litigation lawyer if you would like to take legal action against someone who has misappropriated trust funds.

The First Steps to Take

First, you must suspect that trust funds are being misappropriated. If this is the case, you'll want to speak with a lawyer and possibly launch an investigation. The last thing you want is to pursue litigation against a trustee who is being falsely accused of misappropriating funds because this can damage your relationship with the trustee and will also be expensive and a waste of time.

You will want to fully review the assets that currently exist and determine whether the trustee is living up to their fiduciary duty. 

How to Know If the Misappropriation of Funds Was Criminal

For the misappropriation of funds to be criminal, you will need to prove that the individual who misappropriated the funds did so deliberately. This does not necessarily mean that the funds were taken by the trustee but simply that they were not used properly. Whether or not the individual needs to know that their actions were illegal depends on the state in which they reside.

Contact with the Trustee

Once you believe the actions taken were possibly a misappropriation of funds, speak with your attorney about the best way to approach the trustee. If the trustee is not able to explain what was done with the funds, you will need to take immediate action to make sure that the funds are not mismanaged any further. An attorney will guide you through how to remove the trustee involuntarily.

How to Remove a Trustee

You are able to petition to remove a trustee. You could do this under the grounds that the trustee failed to make the correct distributions. You might remove the trustee because they failed to administer the trust according to rules set out by appropriate documents. 

The trustee might compensate themselves an extraordinary amount. They might be expected to invest the assets and not do so properly. They might not engage in accounting as expected. They might also fail to report to the beneficiaries. Regardless of which problem you are facing, you will need to ask a trust litigation lawyer to receive their opinion.

If you have an issue with a trustee, contact a local trust litigation lawyer.

About Me

Law Information Everyone Should Know

Hi, my name is Jessica Hawkins and welcome to my law blog. My mom and dad are both attorneys so I grew up with a lot of law talk around the house. Even though I decided not to become an attorney, I still have an interest in the law. Plus, when I visit my parents, that's all they want to talk about, so I still learn what I can about the law so that I can join in on the conversation. I wanted to create a blog to inform others about various aspects of the law. In this blog, you'll also find out about the different types of attorney specialties and when it's best to consult an attorney. I hope that you find my blog useful and that it helps to answer your law questions.

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