Family Trust Embesslement

Types of Family Trusts

There are two main types of family trusts:

Revocable Trusts

These are trusts that the grantor can change, amend, or terminate during their lifetime. The grantor maintains control over the assets, and the trust becomes irrevocable upon their death.

Irrevocable Trusts

Once established, these trusts cannot be altered or revoked. The grantor relinquishes control over the assets managed by a trustee for the benefit of the trust’s beneficiaries.

Criminal charges against trustee

Trustees who embezzle over $950 from a trust may face felony embezzlement charges under California law, potentially leading to up to 3 years in jail or even federal charges, depending on the severity of the offense.

What is Embezzlement?

An embezzlement is a form of financial fraud involving the theft or misappropriation of funds or assets entrusted to an individual. This crime typically involves a person in a position of trust, such as an employee, executive, or trustee.

Trustee stealing from trust

In California, if a trustee embezzles trust assets valued at $950 or less, it’s a misdemeanor punishable by up to 6 months in county jail. However, embezzling over $950 is a felony, leading to potential sentencing of up to 3 years in jail.

Elements of Embezzlement

To prove embezzlement, the following elements must be established:

1. A fiduciary relationship between the parties
2. The defendant acquired the property through this relationship
3. The defendant intentionally took or used the property for their benefit
4. The owner of the property did not consent to its use

Embezzlement vs. Theft

The critical distinction between embezzlement and theft is that embezzlement involves a breach of trust, while theft does not.

Family Trust Embezzlement

When a trustee misappropriates or steals assets from a family trust, it’s considered family trust embezzlement. Family trust embezzlement is a serious crime in California, and those found guilty may face severe legal consequences.

Warning Signs

Here are some warning signs that may indicate family trust embezzlement:

1. Unexplained or unauthorized transactions
2. Lack of communication or transparency
3. Changes in the trustee’s lifestyle or financial status
4. Refusal to provide account statements or documentation

Legal Consequences

In California, family trust embezzlement can lead to both civil and criminal penalties. Consequences may include imprisonment, fines, restitution, and removal as trustee.

Preventing Family Trust Embezzlement

There are several steps you can take to help prevent family trust embezzlement:

Selecting a Trustee

Choose a trustee who is trustworthy, responsible, and experienced in handling financial matters. Consider appointing a professional trustee, such as a bank or trust company, to mitigate the risk of embezzlement.

Monitoring the Trust

Regularly review trust account statements and transactions to ensure everything is in order. Request copies of financial documents and ask questions about any discrepancies or concerns.

Legal Protections

Incorporate checks and balances, such as requiring multiple signatures for large transactions or hiring an independent auditor to review the trust’s finances.

Seeking Legal Help

If you suspect family trusts embezzlement, it’s essential to seek legal help as soon as possible.

Finding the Right Trust Attorney

Look for an attorney specializing in trust and estate law with experience handling embezzlement cases. They can help you understand your legal options and guide you through pursuing justice.

Pursuing Legal Action

Your attorney will help you gather evidence, file a civil lawsuit, and report the crime to law enforcement. They will also assist in recovering misappropriated assets and holding the responsible party accountable.

what to do if trustee is stealing

Beneficiaries who suspect their trustee is engaged in theft should seek legal advice immediately. A competent trust attorney can gather the necessary evidence against him/her in court, helping ensure their rights and interests are upheld by holding those accountable while safeguarding beneficiaries’ interests.

Conclusion

Family trust embezzlement in California is a serious offense with severe legal consequences. By understanding the warning signs, implementing preventive measures, and seeking legal help when necessary, you can protect your family’s assets and ensure they are used for their intended purpose.

FAQs

What is the statute of limitations for family trust embezzlement in California?

In California, the statute of limitations for embezzlement is generally three years from the date the crime was discovered or should have reasonably been discovered.

Can a trustee be held personally liable for embezzling from a family trust?

Yes, a trustee who embezzles from a family trust can be held personally liable for their actions, including being ordered to repay the stolen funds and potentially facing criminal penalties.

How can I report suspected family trust embezzlement?

You should consult with an attorney who specializes in trust and estate law to discuss your concerns and determine the best course of action. They can help you file a civil lawsuit and report the crime to law enforcement if necessary.

What are some common examples of family trust embezzlement?

Some examples include unauthorized withdrawals or transfers, using trust funds for personal expenses, selling trust assets without permission, and forging documents or signatures.

Can family trust embezzlement be a federal crime?

While family trust embezzlement is typically prosecuted at the state level, it may become a federal crime if it involves crossing state lines, defrauding a financial institution, or violating federal tax laws.

About Hess-Verdon Trust Litigation Law Firm

Hess-Verdon & Associates is one of the most knowledgeable and most sophisticated trusts and estate law firms in the state of California at both the trial and appellate levels.

Our legal team of Trust Attorneys is well-versed in estate planning, trust administration, and trust litigation.

Our viewpoint is the following: Aggressive legal representation with a team of experts that protect you, our preferred client, with current tax and estate planning strategies.

Our litigation team has spent years acquiring extensive experience in trial preparation, strategy, and trial presentation to help you with your specific case.

We welcome the opportunity to discuss your needs, qualifications, staffing approaches, and rate structures to resolve estate and trust-related matters successfully. Our knowledgeable and aggressive actions are necessary to ensure the trustor/grantor maintains their wishes on the administration of the trust. Call 1-888-318-4430.