Trustee Rights In Financial Abuse Claims California

What Happens When You Are Accused of Trustee Theft?

When a trustee is accused of breaching their fiduciary duties or outright theft, their first action should be to contact a competent estate attorney. A reasonable attorney can provide guidance to settle the affair with minimal trouble.

The goal should be to settle the matter through face-to-face discussions with all the parties involved, as taking things to court might be significantly more expensive, time-consuming, and combative.

A good lawyer will have the experience, skills, knowledge, and dedication required to handle any negotiations before they turn into litigation. Should the situation devolve into a court case despite the efforts of your legal representation, then your lawyer will usually call for a forensic accountant to examine the trust’s financial records to determine whether any inappropriate transactions were made.

This is why any trustees need to keep meticulous and comprehensive records of all their actions on behalf of a trust. These records may be what saves them from potential legal trouble down the line.

Hiring a lawyer immediately after being accused of theft can save you from facing potentially life-changing consequences. An attorney may advise you to step down immediately, giving you time to plan your defense as your lawyer tries to explain the potential misunderstanding before it becomes a bigger problem.

Trust litigation attorneys are specially trained to help people defend themselves against trustee theft charges in civil and criminal court.

What Are the Potential Consequences of Trust Malfeasance Charges?

Trustee theft is a serious charge in the United States, especially since certain trusts can be extremely valuable.

When you consider a trust valued at millions of dollars, it becomes obvious why any suspicion of theft must be taken seriously, and any proven malpractice must be punished severely. The potential consequences of being charged with trustee theft include:

• Facing Embezzlement Charges: A trustee who has been found liable for breaching their fiduciary duties may be brought up on criminal charges because, in the eyes of the law, stealing money from a legal estate constitutes embezzlement. Embezzlement qualifies you to face criminal charges regardless of whether any individual chooses to pursue the case. Embezzlement carries felony charges with it that might result in lengthy prison time.
• Removal of Their Trustee Designation: While this seems like a mild punishment, it should be recognized that in some cases, the trouble might simply result from a trustee’s lack of organizational skills. Poor bookkeeping might result in misplaced funds, lapsed bills, and a general lack of confidence in the trustee’s ability to manage the trust competently.
• Civil Court Charges: The beneficiaries that would have received the proceeds of a trust will have the legal right to sue the trustee accused of theft. The courts will allow them to recover the misappropriated assets or funds from the offending party.

Associated Penalties

Every case is different, so we should not try to make blanket assumptions about what the outcomes will be. Every case of trustee theft will vary depending on its unique circumstances. Should you be defending yourself against misdemeanor will and trust fraud charges, you may face up to a year in prison, besides any fines you might be charged.

If the charges are stepped up to felony will and trust charges, the sentence might be more than five years in an American correctional facility as we said earlier, the fact that many trust cases involve large sums of money, and they are often accompanied by civil proceedings as well.

Final Thoughts

A competent trustee can be a great asset to a grantor, as they can bring in the experience, skills, and expertise required to maintain and grow the value of a trust. The problem many people have is finding a trustee that they can put their faith in completely.

Some people have the misfortune of falling prey to unreliable trustees who take advantage of their position to enrich themselves at the expense of the trust and its intended beneficiaries. This is why the law is so stringent regarding cases of trustee theft.

Should you ever find yourself accused of trustee malfeasance, your first move should be to bring a qualified trust litigation attorney on board. Probate lawyers have the skills to deal with all the issues that might arise while managing a trust.

Be sure only to consider attorneys with a proven track record of dealing with will and trust cases, as they can guide you toward a satisfactory resolution. Call us today.

Misappropriation Of Trust Funds By Trustee

A trustee has significant access and control over assets and finances. For this reason, they are liable for any misappropriation of trust funds, including obtained or retained trust funds and assets. The California common law on misappropriation of trust funds by trustees ranges from misdemeanors to felonies. Lawsuits involving assets or finances not exceeding $950 are distinguished as misdemeanors.

They can attract a maximum jail time of 6 months or other penalties. If the financial claims exceed $950, the rogue Trustee faces embezzlement in court and can be jailed for a maximum of 3 years.

Trustee’s Duty To Account In California

Accounting is an essential parameter of a trust fund as it is reflective of whether the financial decisions made by the Trustee are in favor of the beneficiary. The trustee accounting requirements in California allow protection for you or your loved ones and offer you evidence of elder financial abuse when dealing with predatory trustees.

The Trustee needs to provide precise accounting details to their clients upon request. You can seek a CPA with extensive experience in lawful accounting if you suspect misappropriation. The probate code 16063 requires that the accounting process should have the following documents:

• Any supporting documents of bills, taxes, and disbursements.
• Receipts and statements
• Hiring fees for attorneys, managers, CPAs, etc
• Compensation documents
• Mortgage and loan statements
• A list of assets
• Financial and asset gains and losses

Accounting should be done when the beneficiary wants to replace the Trustee, they are deficient and need to be terminated, or the trust fund needs to be closed. The Trustee’s right is to receive a written request and be offered a 60-day submission period. During this timeline, they are obligated to prepare and present all the required accounting documentation. Lack of proper accounting can attract a court order demanding the same.

Does Elder Abuse Lead To Trust Termination?

Financial abuse can start off as stealing a few dollars from a purse or wallet to commercial fraud involving many properties. These violations are mostly done by those you least expect and, hence, can go unnoticed for a prolonged time. Misuse of conservatorship and guardianship is a threat to trust funds as it can eventually lead to termination of the trust.

With the proper legal representation and supporting evidence, you might be able to get justice and recover the misappropriated funds. Nevertheless, California law has probate codes that compel a trustee to repay stolen money or assets. Trustees should adhere to the legal standards as soon as they are given the power of attorney, and breaching is sometimes considered Criminal.

Is Excessive Trustee Fees A Form Of Elder Abuse?

Easy yes. California local laws regulate the trustee fee. These local laws do not specify a specific rate but offer provisions for reasonable payments. Some parameters that the law uses to determine a reasonable payment are the type of trust and trustee workload. Trustees have the right to compensation on additional administrative duties according to the California probate code 15684.

Some extraordinary services for which a trustee can be compensated are business management duties exceeding the stipulated responsibilities, properties with tax complexities, and changing responsibilities from those indicated on the initial trustee documents. Other extraordinary services include high-risk and time-consuming responsibilities.

Is your Trustee professional or non-professional? Professional trustees often charge you an hourly fee of $30 – $75. On the other hand, a non-professional trustee like a family member might handle the responsibilities for free or at a significantly lower rate. The trust fund is required to handle accounting fees, taxes, attorney fees, property expenses, etc. These transactions should be done through a trust fund administration account set up by the Trustee.

Conclusion

If you suspect you or your loved one’s Trustee is not acting prudently, you can have a lawyer wire an accounting request. Your Trustee should provide you with accounting within the timeline stipulated by your trust requirements. Using an effective strategy to prevent and recover misappropriated trust funds would be best.

This includes collecting enough evidence that the breach occurred. Both trustees and beneficiaries have rights during legal action. Ensure you understand these rights and have the best legal counsel if you are a trustee facing mismanagement civil lawsuits. Contact or email us today for professional legal counsel from a trustee standpoint.