When you appointed a trustee to your trust, you likely chose them for their responsibility. Yet, trustees who seem trustworthy may engage in misconduct. They may withdraw assets from the trust for personal use or manage it in a manner that goes against your wishes. These actions, among others, are a breach of fiduciary duty. If your trustee commits such a breach, it’s important to understand what steps you can take.
Recover the losses caused by the breach
Your trustee’s breach may have caused serious losses for your trust. If mishandling or misappropriation occurred, you have ways to recover your assets. Depending on the loss, the trustee may have to pay interest based on the missing assets’ current value. Or, the trustee may hold liability for the full value of the lost property. If the trustee cannot recover the assets, you have the option to order a surcharge action. This action requires the trustee to repay you with their own money.
Consider the appropriate consequences
Trustees who mismanage or misappropriate assets must face repercussions for their actions. If the trustee’s breach was minor, you can demand that they follow through with their duties in a responsible manner. You may also consider reducing their compensation to further drive home the message. If your trustee’s breach was major, you may feel that they are unable to perform their duties whatsoever. In this case, you can request to remove them. Unless the trust agreement grants you the power to remove the trustee, you will have to file a petition to do so, and a ruling will determine whether the trustee remains.
Having a trustworthy trustee is crucial to your trust’s safety. When your trustee has breached their duty, you must take decisive action. Working with a lawyer who has estate planning experience can help you do so.