If you’re a beneficiary of a trust, you have expectations as far as how the assets within the trust should be managed and how assets should be disbursed. Your loved one who named you as a beneficiary probably had similar ideas. But the reality is that the trustee who oversees the trust has a lot of power. They’re in charge of investing assets, paying taxes, accounting for trust assets, and sometimes even gauging when distributions from the trust are appropriate.
As a result, conflict can arise when you and the trustee don’t agree on investments or how assets are otherwise managed. This could, in some instances, warrant legal action. This is because the trustee is considered a fiduciary, meaning that they have a duty to put the interests of the trust and its beneficiaries first. When this fiduciary duty is breached, you and the trust can be significantly harmed.
If you want to protect your interest in the trust and the trust’s assets, then you need to be aware of how the trustee is acting. Spotting any of the following is justification to delve into the matter further to determine if legal action is warranted:
- Poor recordkeeping: The trustee who is managing the estate’s assets is required to keep a detailed accounting of those assets, investments, distributions and expenditures. When there’s no indication of how trust assets are being used and managed, they’re susceptible to misuse. This, in turn, can lead to significant losses that you don’t catch until it’s too late. Therefore, you should make sure that you receive regular accountings and ask for relevant financial documents from time to time to ensure that the trustee is able to provide them.
- Missing assets: If you find that assets are suddenly missing from the trust without a plausible explanation, there’s a good chance that they’ve been stolen. In these instances, you’ll want to consider whether the trustee has commingled those assets with their own assets, and whether those estate assets were misappropriated for the trustee’s own personal gain. Theft from trusts is all too common, so don’t make the mistake of thinking that it can’t happen to you.
- Favoritism: The trust in question may have multiple beneficiaries, which leaves the door open to the trustee showing favoritism. If you suspect that one beneficiary is being disproportionately favored in an unfair fashion, such as by investing in one family member’s business over another’s, you should start to ask questions to better gauge why the trustee has acted the way that they have.
- The trustee is avoiding you: You should have clear communication with the trustee so that you can have your questions and concerns addressed in a timely manner. If you feel like the trustee has been avoiding you, you should delve into the matter further to see if you can determine why they’re giving you the cold shoulder.
Protecting your interests in probate court
Even if you suspect that the fiduciary duty has been breached, you’re only going to find accountability and recover compensation if you take legal action. Therefore, the onus is on you to be proactive in protecting your interests.
That’s easier said than done in many instances simply because you’re unsure of your next steps. But you can get another set of eyes on your situation by discussing it with an attorney who has proven themselves successful in probate court.
Therefore, if you want a comprehensive analysis of your case and guidance as far as what you can do to protect your interests, you might want to think about reaching out to a legal professional sooner rather than later.