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Hi, this is Stewart Albertson with Albertson & Davidson. And I want to talk to you about bad trustees doing bad things to your interest in a trust.
We do many, many consults with clients where they come in and say, “I’m the beneficiary of a trust. I have a right to these assets and the trustee is refusing to distribute those assets to me. What am I to do?”
And what I will tell you what you shouldn’t do is write more than one letter. Let’s be clear that letters don’t work, but you’ve got to have some writing to the trustee saying, “Hey, I have a right to this distribution under the trust terms, give me my trust distribution.” If the trustee still ignores you, then, unfortunately, you’re going to have file a Petition with the Probate Court. That is the best way to hold one of these trustees accountable or get them to act in a way that you want them to.
In this example, we would generally file a Petition for Instructions with the Probate Court asking the Probate Court to order the trustee to follow through with the trust terms and make the rightful distribution to the beneficiary. So that is one way we hold these trustees accountable.
But, what happens if the trustee is not making this distribution because they’ve gone and used these assets themselves. In other words, they have fraudulently taken these assets from the trust and used them in a manner that the trust does not permit. Perhaps they’ve taken vacations, gone gambling, spent money on their expenses, and they’re not giving you the distribution you’re entitled to.
In that case, not only are you going to want to file the Petition for Instructions that orders them, the trustee, to make the distribution to you. You’re going to want to go after that trustee for damages. You’re going to want to surcharge that trustee. You’re going to ask the Probate Court to give you damages, order damages against the trustee where they have to reach into their own pocket and pay back money to you for the damages caused to the trust.
Again, we’d only want to send one letter in these kind of cases just to set the record that we tried to work with the trustee. If the trustee still won’t follow through with what you’re doing, file a Petition for Instructions to get the court to order them to follow through. And if you find out during that process that the trustee has stolen assets, or misappropriated assets, you’re going to want the court, or ask the court to impose an Order for Sanctions against the trustee so that they have to pay back the damages they’ve done to the trust.