The problems kept adding up related to your father’s trust. Overdue tax notifications surfaced. Distributions to you and other beneficiaries often were late or completely dismissed. And the clincher was that the trustee was seldom available due to his extensive global travels. Where did he get this money?
You suspect that the trustee has mismanaged the trust through means that may include negligence, fraud and ineptitude. In laying out all of these situations before the other beneficiaries, you collectively decide that it is time to take legal action and remove the trustee.
Failing to make distributions
You know that may be time to seek trustee removal when the following actions occur:
- Distribution? What distribution?: Among the primary tasks of a trustee is to distribute the assets of the trust. When a trustee fails to do this, it is a definite sign of breach of fiduciary duty.
- Financial mismanagement: Assets within the trust must be managed and distributed by the trustee. Those assets are for the beneficiaries, not for a trustee to use for personal financial gain. Evidence may surface that the trustee has been stealing.
- Self-dealing: When a trustee places his or her personal interests in front of the trust’s interests, it is time to remove that person. Self-dealing represents a blatant conflict of interest as well as another example of breach of fiduciary duty.
- Failing to pay taxes on time or at all: Such actions represent another alarm that the IRS will definitely hear. The federal government will enforce financial penalties and seek interest payments. The result: assets within the trust will shrink.
- Deficient record-keeping: It is necessary to maintain solid records related to asset distributions, investments, taxes, and gains and losses within the trust. As a beneficiary, you should regularly request to review the financial records.
If you suspect any of these occurrences, or other wrongdoing, you may be able to remove an errant trustee.
If this is the case, contact Bashian P.C.
Our experienced trust litigation attorneys can help you protect your trust, and the legacy due to you.