Imagine this: you are the beneficiary of a trust and are already overwhelmed by the broad spectrum of emotions that come from grieving the loss of a loved one. But what if the trustee your loved one entrusted with carrying out and solidifying their legacy is putting your and your family’s future at risk? For many beneficiaries, it doesn’t take much imagination to put themselves in this situation. It is, unfortunately, not uncommon for trustees to fall short of their obligations to safeguard assets for beneficiaries. Still, you may be wondering, What makes a trustee unfit?
At Gokal Law Group, we have helped countless beneficiaries remove and replace unfit trustees to protect their inheritance and preserve the integrity of the trust. Here is what to know about what makes a trustee unfit and how you can hold them accountable and replace them.
What Makes a Trustee Unfit?
Two things make a trustee unfit: a lack of integrity or an inability to do their job. Let’s examine both.
Oftentimes, a lack of integrity materializes in the form of a breach of a fiduciary duty. Fiduciary duties refer to the legal responsibilities a trustee automatically assumes when they become the trustee. These duties revolve around the trustee always acting in the best interest of the trust and beneficiaries. A trustee cannot benefit from their position as the trustee in any way.
Fiduciary duties are in place to protect beneficiaries and the trust and to ensure that a trustee is doing their job properly. Certain fiduciary duties–for example, the duty to provide an accounting–allow beneficiaries to police trustee behavior and to confirm they are acting with integrity. If a trustee violates a fiduciary duty, it signals a lack of integrity. Examples of a breach of a fiduciary duty include:
- Fraud
- Misappropriation of trust property or assets
- Mismanaging assets (e.g., risky investments)
- Failing to follow the trust document
- Theft of trust property or assets
- Self-dealing
- Disloyalty to the trust beneficiaries
- Charging excessive fees
- Conflicts of interest
- Failing to provide beneficiaries with an accurate trust accounting
- Collusion with one or more beneficiaries to the detriment of the trust or another beneficiary
- Commingling trust assets with their own
However, an unfit trustee isn’t just one who intentionally hurts the trust. General negligence, incapacity, or a lack of knowledge or experience in trust management can also make a trustee unfit.
For example, maybe a trustee is not prioritizing the tasks they must accomplish to administer the trust because they don’t understand the gravity of the situation. This negligence makes them unfit. Alternatively, if a trustee lacks the organizational skills or financial acumen to perform their role, this could also make them unfit. Mental incapacity is another factor that makes a trustee unfit.
Suppose the trustee becomes mentally incapable of making sound financial decisions. In that case, they are unfit to manage the trust responsibly, which also applies to physical disabilities that make it difficult for them to fulfill their duties. This could involve difficulty traveling to manage assets or being unable to handle complex paperwork.
Still, if you believe that the trustee you are dealing with is unfit, you probably want to know what to do next. We are more than happy to help!
“Countless reasons exist that could potentially make a trustee unfit for this position. The only way to truly determine if a trustee is either violating their fiduciary duty or unable to perform their role is by working with a lawyer. They will be able to determine the best course of action for your specific situation.”
– Alison S. Gokal, Partner, Gokal Law Group
Related Article: California Trust Law: What’s a Common Breach of Fiduciary Duty?
What to Do if a Trustee is Unfit?
As soon as you suspect a trustee is unfit, it is essential to work with an attorney. Contacting an attorney and having a consultation for them to review the trust document and evaluate your case is crucial to determine what the best course of action is for you in your specific situation.
For example, if you are dealing with a negligent trustee or one who is unaware of their responsibilities, communicating with them and expressing your concerns may be enough to resolve the issues and put them on the right track.
If communication yields no results, then you have two options: mediation or trust litigation, both of which an attorney will help you with. If you have no choice but to pursue litigation, your attorney will gather evidence, file a petition with the court, and represent you so that you can remove and replace them and, ultimately, defend your inheritance.
Related Article: How Do You Prove a Breach of Fiduciary Duty?
Do You Need Help Dealing with an Unfit Trustee? We Can Help.
Grief over the loss of a loved one is already a tremendous burden on your shoulders, and the last thing you need to worry about is an unfit trustee jeopardizing your inheritance and undermining the legacy your deceased loved one wanted to leave behind. If you suspect a trustee is unfit for the role, do not hesitate to take action. You deserve premier representation to safeguard your inheritance.
Visit our Contact page to schedule a consultation.
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