Trustee Rights in Elder Abuse Allegations

Trustee Rights in Elder Abuse Allegations

When people talk of elder abuse, they tend to presume that it is done by relatives, caretakers, employed nurses, or other individuals who take care of an elderly person’s daily needs. But, elder abuse can also be done by less obvious participants, including beneficiaries and trustees. This is precisely where finances are concerned. There is so much to know about elder abuse, especially legally, which is why this article is all about trustee rights in elder abuse allegations and other related matters.

Who is a Trustee, and what is Their Role?

A trust usually has three parties;

Grantor or Settlor

A grantor or a settlor is the individual who establishes the trust and moves funds into it.

Beneficiary

These are the people allowed to receive assets or funds from the trust.

Trustee

A Trustee will be the person managing the trust.

When someone moves assets or funds to a trust, they relinquish some or all of their power over the funds and assets to the trustee, who oversees them on behalf of the grantor and to the beneficiary’s advantage.

This is why the trustee’s work is vital since they have the power to sell, buy, and even borrow against the grantor’s assets. Therefore, the law enforces fiduciary duty on the trustee. This means that the trustee has to put the beneficiary’s interests above their interest and, as such, needs to avoid making moves that would endanger the trust.

The obligations of a trustee are:

• Abide by the stipulations of the trust.
• Deal with the beneficiaries objectively.
• Run the trust only in the beneficiaries’ interests.
• Forgo using trust funds or assets for their gain.
• Avoid transactions that aren’t part of their duties.
• Take judicial measures to uphold the trust property & add value to it.

If a trustee violates any of these responsibilities, they may be answerable for breach of fiduciary obligation. This breach financially harms an elderly person and can be viewed as a type of elder abuse, especially if it is a revocable living trust, whereby the grantor may permit the successor trustee to manage their affairs if they become incapacitated.

Instances of Elder Abuse

As pointed out, when a trustee violates their fiduciary duty, and that violation harms an elderly person financially, it becomes a case of financial elder abuse. Here are some of the ways a trustee can be involved in such abuse:

Fraud

Fraud happens when a person lies about specific facts intentionally to another individual to cause financial harm. Trustees can defraud the grantor or beneficiaries of the trust and lie concerning the nature of one or many transactions. For instance, a trustee may talk of an investment prospect to the grantor or beneficiaries and tell them that it will add value to the trust while realizing that this investment is a pyramid scheme.

Embezzlement

Embezzlement takes place when a person steals or mishandles money that has been delegated to them. While this phrase is mainly linked to proprietors’ theft, it can also be used in the probate scene. An example is when a trustee steals assets or cash from their entrusted trust. In such instances, trustees often claim they were “borrowing” to return later.

Improper Gifts

Another role of the trustee is abiding by the stipulations of the trust, such as following the instructions concerning distribution, otherwise called gift. According to the trust, a trustee biased towards one or more beneficiaries could gift them improperly by offering that beneficiary more than they should.

Self-Dealing

These are the transactions that point to a financial benefit for the trustee. Since they are fiduciaries, these kinds of transactions are not allowed because fiduciaries must put the interests of the beneficiaries above theirs. For instance, a trustee can partake in self-dealing by buying himself property using the funds from the trust.

Collusion with Beneficiaries

Collusion with beneficiaries includes two or more individuals conniving in a secret arrangement to gain an advantage. It can happen if the trustee and some beneficiaries conspire to get a more significant share of the trust assets than stipulated in the trust. For example, a materialistic beneficiary could give a dishonest trustee a portion of the gains, provided they distribute the assets improperly.

Commingling Assets

Assets co-mingling is when the trustee combines the trust assets with their own, which makes it hard to know which assets belong to whom. This can also make it hard for the trustee to disburse the assets to the beneficiaries or make other associated payments. The instances above are some of the many ways elder abuse happens, and it, at times, ends up with one abused beneficiary or more.

Trustee Rights in Elder Abuse Allegations

If a trustee is accused of elder abuse, their rights are the same as those of any alleged criminal. Also, suppose the trustee gets sued because the beneficiaries allege they did financial elderly harm, like abusing their authority as the trustee. In that case, they will face both criminal and civil charges.

Therefore, you should get a criminal defense lawyer who knows experts in the financial scene, like forensic accountants and financial engineers, who are well-known for their knowledge and understanding of accounting and math.

For the judge to convict a trustee of elder abuse, the prosecutor has to prove that they embezzled or stole the elder’s funds or assets. The fundamental aspect of proving theft is the accused person’s intent. Therefore, if the lawyer can prove that you didn’t do it on purpose, the court will render you innocent.

What Founds a Violation of Fiduciary Duty?

A violation of fiduciary duty happens when a fiduciary (the trustee) acts contrary to the terms of the trust or what is required from a fiduciary legally. Additionally, a violation can happen if the assets are no longer profitable, also called waste, or from having many conflicts of interest. A fiduciary can be given power over assets, funds, personal details, and the power to make decisions about how the assets are managed. Therefore, the fiduciaries’ decisions will affect the people they represent.

Suppose an executor, trustee, or power of attorney does not manage the assets correctly, embezzling funds or making financial moves that gain only them and a few other beneficiaries. In that case, they should be suspected of violation of fiduciary duty. In such situations, the beneficiaries should talk to an estate litigation lawyer to avoid further loss, harm, and mishandling of assets.

The suspected executor, trustee, or power of attorney should also look for a criminal lawyer. Plus, they will require professional supervision to prove that their financial moves were justified and right in the given circumstances.

Is Financial Elder Abuse Similar to Fiduciary Abuse?

Financial elder abuse can, in some instances, be fiduciary abuse, but not all the time. If the accused worked as a fiduciary to the elderly accuser, they might be taking part in financial elder abuse and fiduciary abuse. This is a regrettable situation, considering that close family members, caregivers, and advisors are more likely to abuse and prey on their elderly friends and family members through deceptive moves and fraudulent schemes.

Often, older adults are mentally or physically incapacitated and, therefore, easily confused. This is why they depend on others to manage their assets and lives. This is why some people target them for forgery, coercion, identity theft, theft, and fraud. For this reason, a fiduciary for an elderly individual is in a position of great responsibility since the individual they are working for may not have the capacity to advocate for or even comprehend their interests.

Does Violation of Fiduciary Duty Have a Statute of Limitations?

Yes, a violation of fiduciary duty has a statute of limitations. However, it depends on your claim and your relationship with the fiduciary. Generally, the statute of limitations on such cases in California may be between 3 to 4 years. Hence, it is vital to call your lawyer when you notice any discrepancies in your finances or signs of fiduciary duty abuse.

Our Elder Abuse Attorneys Can Help You Out!

Understanding your trustee rights in elder abuse allegations is relatively easy. Still, you will need legal assistance since such allegations can result in criminal charges, leading to considerable jail time. What’s more, if you are an abused beneficiary, feel free to contact us so that we can help you out!

We have a knowledgeable team of elder abuse attorneys who will protect your rights and, if need be, defend you if you go to trial. Our experienced lawyers will establish a solid legal defense strategy after assessing your case and strongly advocate for your rights.