If one of your loved ones went through all of the effort of creating a trust, they likely did so because they had very specific intentions for their legacy. A trust allows people more control over the use of the assets they leave behind and can also have the added benefits of reducing tax liabilities and claims by creditors against the assets in the estate.
Unfortunately, the usefulness of a trust can depend on how well the trustee named to administer the trust performs their duties. In some cases, a trustee may use their position for their own personal benefit, potentially with negative financial consequences for the beneficiaries. What happens when a trustee puts their own interests first?
A trustee has a fiduciary duty to the trusts and its beneficiaries
“Fiduciary duty” is a legal term that implies the highest standard of obligation between two people possible under the law. In a situation where one person has a fiduciary duty to another, the individual with that duty must put the interests of the other party above their own in all related matters.
For a trustee, fiduciary duty means making financial and legal decisions about the trust that will maximize the value of the assets within the trust and the benefit of the trust to its beneficiaries. Choosing to sell assets for a reduced price, purchasing items from the trusts at less than fair market value or otherwise compromising the value of the trust and its assets for personal gain could all constitute a violation of that fiduciary duty.
If you are a beneficiary of a trust and have reason to suspect that the trustee has violated that critical fiduciary duty, you may be able to challenge their role as trustee in order to protect the trust and its assets. An experienced attorney can provide valuable guidance.
