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Mar 14, 2022 by |

Santa Clara County Financial Elder Abuse Attorneys: What To Do If A Trustee Steals From A Trust

ATTORNEY NEWSLETTER

Criminal Theft And Breach Of Duty

Civil Remedies Of Removal And Damages

Enhanced Remedies Under Elder Abuse Act

Many Californians, especially seniors, create trusts to hold their assets.  Laws under the California Probate Code govern these trusts.  See Cal. Probate Code §§ 15000-19530.  The individual creating the trust, referred to as the “trustor” or “settlor,” may act as his or her own trustee at the beginning, and appoint others to succeed him or her when the settlor is no longer able to act or dies.   Successor trustees may include a surviving spouse, other family members, financial advisors, or professional fiduciaries, all of whom are held to the legal standard of fiduciary duty once they begin to act as trustee. See, e.g., Probate Code §§ 16040-16042.  Unfortunately, some of these appointed successors may breach their fiduciary duty e by embezzling or commingling funds, using trust property for their own benefit, borrowing against trust assets, or losing or mismanaging trust property. Acts of self-dealing and mismanagement are grounds for removing a trustee, and seeking damages (known as surcharging) for whatever the trust has lost as a result of the misconduct.  Probate Code §§ 16400-16421, and 17200.  Evans Law Firm, Inc. represent settlors and trust beneficiaries who have suffered injury as a result of a trustee’s breach of fiduciary duty.  If you or a loved one has been a victim of a breach of fiduciary duty by a trustee in Santa Clara County or elsewhere in California, contact the Evans Law Firm, Inc. today at (415) 441-8669 and we can help.  Our toll-free number is 1-888-50EVANS (888-503-8267).

Examples of Breach of Trustee Duty

In controlling the assets of a trust, a trustee has significant responsibility and authority.  Unfortunately, an unscrupulous trustee may exercise that authority for his own interest and betray his duty to the trust itself and trust beneficiaries. Some of the ways in which trustees can steal are: 

  • Transferring assets from a trust into their own name
  • Skimming money off the top of bank accounts
  • Pocketing the profits from asset sales
  • Neglecting to list and itemize an asset and keeping it for themselves
  • Overcharging for their services or delegating their responsibility to someone else and still collecting a trustee fee
  • Issuing “loans” from the estate to themselves or to “friends.” 

Removal And Other Remedies

Whenever a trustee violates his or her duty, California law provides a variety of remedies for those who have been injured as a result of a trustee’s breach of fiduciary duty. California Probate Code Section 16420 allows an injured settlor or beneficiary:

(1) To compel the trustee to perform the trustee’s duties.

(2) To enjoin the trustee from committing a breach of trust.

(3) To compel the trustee to redress a breach of trust by payment of money or otherwise.

(4) To appoint a receiver or temporary trustee to take possession of the trust property and administer the trust.

(5) To remove the trustee.

(6) Subject to Section 18100, to set aside acts of the trustee.

(7) To reduce or deny compensation of the trustee.

(8) Subject to Section 18100, to impose an equitable lien or a constructive trust on trust property.

(9) Subject to Section 18100, to trace trust property that has been wrongfully disposed of and recover the property or its proceeds.

Where the victim of a breach of duty is a senior or dependent adult, additional remedies are available under the California Elder Abuse and Dependent Adult Civil Protection Act (“Elder Abuse Act”), Welf. & Inst. Code § 15600 et seq.  The abusive trustee, and anyone assisting him or her such as an attorney, may be liable for financial elder abuse as defined under the Elder Abuse Act.  Cal. Welf. & Inst. Code 15610.30.  Under that statute, the court awards mandatory attorneys’ fees and costs to the injured senior under certain circumstances. Cal. Welf. & inst. Code § 15657.5. The senior may also be entitled to extra damages in certain instances.

Contact Us

If you or a loved one has been a victim of a breach of fiduciary duty by a trustee in Santa Clara County or elsewhere in California or, contact Ingrid Evans at (415) 441-8669, or by email at <a href=”mailto:info@evanslaw.com”>info@evanslaw.com</a>. Our toll-free number is 1-888-50EVANS (888-503-8267).

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