Daily Law Group
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Is your trustee a thief?

Managing the financial undertakings of someone’s trust is not as easy as signing a few checks. A trustee safeguards assets for someone else. When selecting someone to put in charge of a trust, whether family member or close friend, the situation can become complicated if it appears that some form of theft has happened to the trust. Attempting to prove that fraudulent activity has occurred is difficult. There are several signs to look for when reviewing the trustee’s use of the account that demonstrate the fraudulent use of the trust.

How to prove mismanagement of a trust:

First and foremost you must show that the trustee did not act in the best interest of the trust and its beneficiaries. Here are common scenarios that demonstrate dishonest activity:

  • The trustee had a conflict of interest and worked in the best interest of someone other than the beneficiary
  • The trustee personally or professionally benefits monetarily from misuse of the account and did not report the profit to the recipients
  • The trustee was influenced, bribed or rewarded for making decisions with regard to the trust
  • The trustee was negligent in managing the trust and did not safeguard the best interests of the beneficiaries
  • The trustee acted in the best interest of one or more of the recipients but not in the best interest of all of the beneficiaries

Writing checks designated for a third party, “loans” and cashing money orders written out to the trustee are all forms of stealing from a trust. Regardless of the manner used, the result is the same; the funds disappear and the beneficiaries are left empty-handed.

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