California Truste Estate Fraud Lawyer

Fraud at The Time of Trust Creation

Trust fraud can happen at the creation of the trust document. At the genesis stage, trust fraud manifests in many ways. For instance, if the benefactor acts on works with misguided information, then the entire document could be rendered fraudulent. The contents could affect the beneficiaries and other interested parties. If the trustee knew about this and failed to disclose or report it, then they are party to fraud.

Further, if anyone close to the trustor, such as kin or friend (later appointed trustee), unduly influences them to change the trust initially, that could lead to problems. In many cases of undue fraud and coercion, the coerced victim is an older person with mental or physical impairments. If details of this coercion come out and it’s found that the trustee was involved, they can get sued for fraud.

Fraud In Trust Administration

Different levels of fraud can happen at the execution stage. Let’s say that a trustee forges a signature that shows that beneficiaries consented to a transfer of funds. This is fraud. If the trustee misleads the beneficiaries or misrepresents the contents of the trust, they risk getting sued for fraud.

Fraud During Trust Distribution

There are countless examples of trustee fraud in the distribution phase. Trustees should comply with all the terms of the trust and state laws when distributing funds and assets from the trust. They must act in the beneficiaries’ interests and not their own.

This phase is when most people face the temptation to do under-the-table deals. There could be pressure from a beneficiary, for instance, to bump up their share of the trust or subvert the interests of other heirs. This is also when most trustees accidentally or knowingly commit unlawful acts such as un-procedurally disbursing funds. This constitutes fraud.

Trustee Frauds: Examples and Scenarios

Breaching trust or will terms.

The trustee owes a fiduciary duty to the beneficiary. They must follow the law and comply with the terms of the trust when administering it. However, if the trustee gets into actions like doing business with confidence or mingling their assets with that of the faith, this is fraud.

Trust mismanagement

The trustee must safeguard funds and assets in the trust. They should invest them in a manner that leads to growth and continuity, as pronounced in the faith. If the trustee contravenes this and puts the trust funds in risky investments, this could be interpreted as fraud.

Failure to account

Trustees should supply timely financial reports to the beneficiaries. The words should capture the complete picture of the trust assets, showcasing cash flow, interests, and growth projections. Failure to keep beneficiaries updated, to cheat them out of their inheritance, can be labeled as fraud.

Embezzlement

This is straight-up self-dealing, theft, and graft. If the beneficiaries bring embezzlement charges against you, you must work with a fraudulent wills lawyer. The reason is these are serious charges that could contain a criminal element. You might get sentenced to prison. Evidence of embezzlement includes fluctuating bank balances, unexplained expenses, withdrawals, and missing assets.

Squandering assets

Trust law is clear. The trustee cannot use the trust’s assets for their benefit. If you use the trust assets to buy yourself gifts and purchases, that’s fraud.

Accounting fraud

Accounting trustee fraud happens when a trustee unjustifiably alters the financial documents of the trust. They may do this to change the trust’s profits or losses for personal enrichment. These frauds are also likely innocently committed by trustees with limited accounting knowledge. It’s always advisable to work with experts such as accountants and lawyers to help with trust administration matters.

Adding or removing beneficiaries

The trustee has the authority to handle assets in any way that aligns with the terms of the trust and the interests of the beneficiaries. However, this high access provides an unlimited opportunity for theft.

The latter can happen when the trustee directs the funds in the trust to an unnamed party or adds or removes a beneficiary from the faith. When this happens, the aggrieved beneficiaries will undoubtedly incur fraud charges against the trustee.

Severe Criminal Penalties

Many states have laws that stipulate severe civil and criminal fines for fraudulent trustee activities. Some examples of severely punished conduct include signature forgery, funds embezzlement, and duress.

A trustee defense attorney can help reduce penalties and fines depending on case specifics. They may help reduce the charges to a felony or misdemeanor so that you don’t go bankrupt because of the lawsuit.

Exaggerated Or False Claims

Many times, harmless mistakes or misunderstandings can trigger fraud charges. Further, there are cases where a beneficiary may make exaggerated claims to get the trustee kicked out of the trust.

In these cases, hiring a fraudulent wills lawyer is essential. The lawyers will defend you in court and get all false accusations thrown out. The experienced trustee fraud attorneys may employ diverse legal strategies so that even if the evidence is damning, damages get reduced and the case dismissed.

Inaccurate records

You may have tried hard to maintain proper or accurate records. Then, one day, because of a typo that can easily be explained, you find yourself being sued by a beneficiary for fraud. If this happens, find a lawyer or mediator. It would be best if you protected your interests.

Serving self-interests

False claims around trust serving self-interests revolve around self-dealing and high fees. A beneficiary who wants you removed from your role may incur trumped-up charges, accusing you of using trust assets for personal gain or charging exorbitant prices for your services. A fraudulent wills lawyer can help to defend you in court.

Theft

Did you allegedly “borrow” trust assets for your advantage? Maybe it is not what it seems, and there is a reasonable explanation for missing funds. However, suppose the beneficiaries or interested parties bring up fraudulent claims against you because of this. In that case, you must work with a lawyer to show that you never breached your fiduciary duty.

Common Defenses for Trustee Fraud Charges

Trustee fraud charges can lead to harsh penalties, hefty fines, and years in prison. The best lawyers will mount robust defenses against all allegations of fraud. Here are some of the defenses they will explore.

No intent to commit fraud

In many states, the plaintiff must show that you intentionally committed to defraud the trust. So, if you can prove that it was an honest mistake or a misunderstanding, you may be able to overcome the charges.

No damages

Not all actions that contradict the terms of the trust or the laws of the state may lead the beneficiaries to suffer harm. If the plaintiff cannot show proof of direct damage after the act, the case will not stand. There might be no crime.

Duress

Let’s say you were forced into committing fraud- maybe a beneficiary threatened you with violence to make an irregular funds transfer. If failure to comply would have endangered your life or that of your loved ones, then no actual fraud was committed.

Statute of limitations

If much time has elapsed between the alleged fraud and the lawsuit, you can have the case thrown for contravening statutory laminations.

Necessity

Your fraudulent wills lawyer can help present this argument. They can say that you committed the fraud out of necessity to forestall an imminent, more significant harm to the trust. The actions may be justified if sufficient evidence supports this argument.

Will I Go To Court?

Many of these disputes can be resolved through negotiation and discussions. But if the beneficiaries insist on filing a lawsuit in court, an experienced trustee defense lawyer will help you immediately. Although most people prefer to keep these disputes out of court, sometimes going to court is unavoidable.

How Much Will It Cost?

The costs of trustee defense and litigation vary from case to case. Depending on the case’s complexity, timing, and whether you go to court, you may pay less or more. The costs are typically lower if the disputes are solved and settled through mediation. However, lawsuits are usually costly if no agreement can be reached in mediation. The good thing is if you win the case, the plaintiff may shoulder the total costs of the litigation, and you may be eligible for other damages compensation.

Please speak to our attorneys.

We are a team of experienced lawyers ready to help trustees defend their rights and honor. If you are facing trustee fraudulent charges, talk to us. We will devise the best defense strategies to win your case.