After your loved one’s passing, you may have been pleased to learn that you had been named a beneficiary to a trust. The fact that your loved one thought of you and wanted to protect assets for your use through the terms of the trust may have given you a warm feeling and a sense of connection as your family member continues to provide for you after his or her passing.
While you benefit from the trust, you do not act as trustee. This means that someone else has the responsibility of following the terms of the trust and distributing assets to you and any other beneficiaries of that trust. While you may have felt comfortable with this arrangement at first, certain actions may have left you feeling wary of the trustee.
Causes of concern
A major issue that could point to an abuse of power relates to the trustee committing fraud or embezzling from the trust for personal gain. You may have a difficult time pinpointing this type of action, especially if the trustee does not cooperate with your requests for certain information regarding the trust. However, as a beneficiary, you should have received information regarding the terms of the trust and may have noticed when it did not appear as if the trustee was following those terms.
Looking into records
As part of the trustee’s duties, he or she should keep records of transactions made in relation to the trust, especially financial ones. If you suspect that the trustee has breached his or her fiduciary duty, one of your first steps may be to request records relating to the trust. Your suspicions may rise if you notice any of the following red flags:
- Unreasonably high trust administration costs
- A lack of proper trust-keeping records
- The trustee having mixed personal assets with trust assets
- Inconsistencies in records regarding income and payments from the trust
Unfortunately, cases have occurred in which trustees may take money from trusts with or without the intention of paying the trust back. Even with such intent, borrowing from a trust breaches the trustee’s fiduciary duty and is cause for concern.
Trust litigation
If you have reason to believe that the trustee associated with a trust from which you benefit has acted unscrupulously, you may want to find out more information on your legal options. Trust litigation may be necessary in order for you to ensure that you and any other beneficiaries receive your rightful assets and that the terms of the trust are honored.