Trustees found guilty of self-dealing or conflicts of interest can be held personally liable for resulting damages and may face removal from their position.
A beneficiary does have the ability to sue a trustee if they are mishandling the trust. If a trustee is not abiding by the will of the trust, they are mishandling trust assets, or they are not fulfilling their fiduciary duty, legal action could be a viable option.
This is a fundamental concept of trust law: the separation of legal and equitable title. In other words, while the trustee has the legal authority to manage and control the assets, they do so not for their own benefit, but for the beneficiaries.
Beneficiaries Can Also Be Abusers
Beneficiaries, while they do not hold as much power over the assets in a trust as the trustee, are also capable of committing financial elder abuse.
Trust beneficiary rights include: The right to a copy of the trust instrument. The right to be kept reasonably informed about the trust and its administration. The right to trust accounting.
As previously mentioned, trustees generally cannot withhold money from a beneficiary for no reason or indefinitely. Similarly, trustees cannot withdraw money from a trust to benefit themselves, even if the trustee is also a beneficiary.
A trustee may withhold money or assets from a beneficiary if they must focus on other responsibilities surrounding the estate. For example, if the estate becomes subject to a tax audit or litigation arises, a trustee may refuse to give beneficiaries their share of the assets until these issues are resolved.
Under California law, embezzling trust funds or property valued at $950 or less is a misdemeanor offense and is punishable by up to 6 months in county jail. If a trustee embezzles more than $950 from the trust, they can be charged with felony embezzlement, which carries a sentence of up to 3 years in jail.
A trustee typically has the most control in running their trust. They are granted authority by their grantor to oversee and distribute assets according to terms set out in their trust document, while beneficiaries merely reap its benefits without overseeing its operations themselves.
In general, the steps to this process are: The trustee must send a written notice to the beneficiary to vacate the real property. Under California law, if the beneficiary has been in possession of the property for less than a year, then a 30-day notice is sufficient.
Depending on the complexity of the case, it may cost anywhere from a few thousand dollars to $100,000 or more to dispute the terms of a trust.
An estate beneficiary has a right to sue the executor or administrator if they are not competently doing their job or are engaged in fiduciary misconduct.
Beneficiaries have a right to sue the trustee.
That is fairly easy under California law if there is no issue with the identity of the trustee. Next, you must establish a breach of that duty.
If you are the designated beneficiary on a deceased person's bank account, you typically can go to the bank immediately following their death to claim the asset. In general, there is no waiting period for beneficiaries to access the money; however, keep in mind that laws can vary by state and by bank.
A trustee must abide by the trust document and the California Probate Code. They are prohibited from using trust assets for personal gain and must act in the best interest of the beneficiaries. Trust assets are meant for the benefit of the trust beneficiaries and not for the personal use of the trustee.
Penalties Associated With Will and Trust Beneficiary Fraud
Depending upon the unique circumstances of your case and the charges you're facing, you could be facing extensive fines and even jail time, if convicted.
In order for the beneficiary to hold the trustee accountable, the beneficiary must have information about what the trustee is required to do and what the trustee actually does. Thus, the trustee has a duty to account and to inform.
Trustee malfeasance refers to any type of negligent, self-serving, erroneous, or retaliatory conduct committed by the trustee of a trust resulting in harm to trust assets or beneficiaries. Trustee malfeasance is a broad term encompassing many different types of offenses, both intentional and unintentional.
Per California trust law, if a trustee has committed a breach of their fiduciary duty, the court can deem them personally liable for damages. The extent of liability, ultimately, depends on the severity of their offense and your situation.
Trustee: Trustees often have more ongoing authority, especially in the case of living trusts or long-term trusts. They may manage and distribute assets over many years, depending on the terms of the trust.
A petition for removal of a trustee can be filed by either a co-trustee or a beneficiary. The petition may also seek financial damages from the trustee. Sufficient evidence needs to be submitted to show the court that the trustee violated the terms of the trust agreement or their fiduciary duty.
Beneficiary abuse is not acceptable in California's trust and will cases. Being appointed as a trustee or executor of a will is a big responsibility. However, some trustees and executors in California exploit this position, unsuspecting unassuming beneficiaries.
Yes, if they suspect foul play, beneficiaries, former beneficiaries, and heirs have the right to take legal action against you.
Can a Trustee Change the Beneficiary? Trustees generally do not have the power to change the beneficiary of a trust. The right to add and remove beneficiaries is a power reserved for the settlor of the trust; when the grantor dies, their trust will usually become irrevocable.