You may be thinking about creating an estate plan or just may have created an estate plan and thought, it is great to have a trust in place, but how do I know that the Trustee of the trust is going to follow my wishes after I am gone? This is a good question and there are numerous mechanisms in place to make sure a Trustee follows your wishes when you are gone. A good way to help make sure this happens is to discuss your situation with a Fenton, MI probate lawyer and get a solid plan in place.
Most estate planners will agree that you should pick someone you have great trust in to be your trustee. Having someone you trust in place as trustee may limit your worries about this question. However, even those you trust do not always do the right thing, and for that, there are mechanisms to make sure the trustee does their duties correctly.
One of the biggest ways a trustee is kept in check and forced to perform their duties is from your relatives and other beneficiaries of the trust. The beneficiaries of your estate are going to be asking about what is going on with your estate and when they can expect to receive their distributions. Your Trustee is required by statute to provide information to the trust beneficiaries and report to them as to what is going on with your trust. Beneficiaries will typically be close watchdogs of the trustee because they want to receive their distributions. If trustees do not follow the terms of the trust, the beneficiaries have legal recourse against the trustee.
If a trustee fails to follow the terms of the trust, there are potential criminal charges that they could face depending on how far they deviate from the terms of the trust and if those deviations are for their own benefit or the benefit of those close to them. Depending on the actions of the trustee, fraud, embezzlement, theft, or other criminal charges may be appropriate. If convicted, these obviously have very serious consequences for the trustee who committed them.
The beneficiaries of the trust also have civil recourse against the trustee depending on their actions. Depending on how serious the breaches of the trustee were, the beneficiaries have multiple remedies available to them through the courts including:
- Having the trustee removed and another trustee appointed;
- Having an injunction issued barring or compelling certain conduct from the trustee;
- Requiring that the trustee provide accountings for their actions as trustee;
- Requiring the trustee to attempt to undo any wrongful acts they committed;
- Requiring the trustee to pay back any funds wrongfully used or taken;
- Requiring the trustee to pay the trust any damages the trust incurred as a result of the trustee’s conduct; and
- Requiring the trustee to pay treble damages in cases of conversion, embezzlement, or statutory stealing.
As you can see, there are plenty of legal reasons that a trustee has to follow the terms of your trust. If a trustee does deviate from your wishes, the law has mechanisms in place to make sure those wrongs are righted. If you have more questions about this subject, or if you believe you know of a trustee that is not properly performing their duties, please reach out to Gudeman & Associates, P.C. today so that we can assist you.
