When you designate a trustee for your trust, you expect that they will endeavor to manage the trust’s assets with integrity and in accordance with the terms of the trust.
While this is the case in most instances, not all trustees carry out their mandate as required, leading to potential issues such as financial loss for the beneficiaries, legal disputes and damage to the trust’s purpose. It’s important to be vigilant about elements of trustee misconduct such as the following.
1. Trustee neglecting or mismanaging the trust
When a trustee abandons their duty to properly manage or invest the trust’s assets, it can lead to significant financial loss or decreased value of the trust. This neglect might manifest as a failure to regularly review investments, a lack of due diligence in making financial decisions or insufficient attention to the maintenance and protection of the trust assets.
2. Trustee failing to abide by trust terms
Trust operations are guided by the specific instructions and provisions outlined in the trust document. When a trustee disregards or fails to adhere to these terms, they undermine the trust’s intended purpose and can cause unintended consequences for the beneficiaries. This might include making unauthorized distributions, deviating from specified investment strategies or ignoring conditions set forth by the trust creator. Such actions can result in disputes, financial discrepancies and a breach of fiduciary duty.
3. Unwarranted hostility
In stark contrast to their mandate, trustees have been known to fight against beneficiaries or engage in unnecessary disputes. This unwarranted hostility can take the form of unreasonable resistance to legitimate beneficiary requests, excessive litigation or creating a contentious atmosphere that impedes the trust’s administration. Such behavior not only damages the trust’s purpose but also can lead to prolonged legal battles, increased legal fees and emotional distress for the beneficiaries.
If you suspect trustee misconduct, legal guidance can help you understand your legal options for addressing the issue which may include initiating trustee removal where the grounds may be deemed sufficient.