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Beneficiaries have to be able to trust their trustee. Period. Trusts occur in different ways: Automatically by operation of the law, by express written document, or by express unwritten agreement. Sometimes trustees don’t know they’re trustees because the trust has arisen automatically by operation of the law. That is no excuse. The relationship between a trustee and beneficiary relies on the ability of the beneficiary to trust the trustee.
Generally speaking, the following people are trustees: executors or administrators of an estate, adult children who hold their parent’s property in their names and spouses whose long-time spouse has contributed to their business or homes.
A trustee has an important role. Trustees are in the precarious position of legally owning property for the benefit of someone else (beneficiary). Trust property does not belong to the trustee, it belongs to the beneficiary. Due to their position of power over the beneficiaries property, trustees have certain legal obligations and they must adhere to certain duties.
An example of a trustee breaching her duties is as follows:
On January 13, 2013, it was reported that a woman was charged with using trust property for personal use. She was named the executor and trustee of her friend’s estate. Her friend had made a will in June 2008 that named two charities as beneficiaries of the estate, with the remainder going to another beneficiary. The executor and trustee used the funds for personal use including placing a line of credit on the home of the deceased. She spent a great deal of money on casinos and gambling. The original estate was worth $648000 but was reduced to about $33000.
One of the trustee’s duties is to report to the beneficiaries, on request of any of the beneficiaries, how much money is left in the estate and where all of the money missing from the estate went. This is called the duty to account to the beneficiaries.
The beneficiary that was supposed to receive the residue alerted police that the executor and trustee’s had refused to account for all of the money that was missing from the account. The woman was charged criminally, but there is also the possibility of a civil suit against the woman by the beneficiaries.
If you or someone you know is dealing with a difficult executor or trustee and wants some more information about what to do, contact us. At Richter Trial Lawyers | thegoodfirm, we’ve successfully represented people wanting trustees removed. For a free claim evaluation, please call us at 604-264-5550.
Beneficiaries have to be able to trust their trustee. Period. Trusts occur in different ways: Automatically by operation of the law, by express written document, or by express unwritten agreement. Sometimes trustees don’t know they’re trustees because the trust has arisen automatically by operation of the law. That is no excuse. The relationship between a […]