Your parents or grandparents put a trust in place for you because they wanted to protect the wealth (and you) from grasping fingers. What if they put the wrong person in charge of it?
Trustees are tasked with managing the assets within a trust in a way that preserves them or grows them for their intended purpose. They’re required to disburse those funds in accordance with the trust’s provisions. Perhaps most of all, they’re required to put the goals of the trust ahead of their own.
When a trustee fails to live up to those expectations, that’s considered a breach of their fiduciary duty.
What does a breach of fiduciary duty look like?
Every situation is different, but there are some common signals that a trustee is failing to uphold their responsibilities. They include:
- Commingled assets: A trustee should never treat the trust like their own personal piggy bank, and that means that their funds and the funds from the trust should never be mixed.
- Incomplete records: There should be transparency wherever the trust is concerned. If a trustee isn’t forthcoming about the health of the trust, its investments or its disbursements, that’s a clear signal that something is wrong.
- Unresponsiveness: When a trustee fails to respond to requests for information, questions from beneficiaries or other important communications, you should probably act quickly to determine what kind of problem you have.
- Conflicts of interest: When a trustee starts using the trust to back someone’s business (via an “investment”), that’s a sure sign they aren’t putting the trust and its beneficiaries first.
- Poor investments: Whether it’s due to a lack of care or a complete inability to invest wisely, poor investments can drain a trust dry. If you suspect trouble where the trust’s investments are concerned, you may need to call in a financial advisor right away.
If you suspect that a trustee may need to be removed, you probably anticipate a fight — and you’re probably correct. Take immediate action to learn more about your legal options.