QUESTION
Can a trustee collect her 1/4 of a house sale without dispersing The remaining funds to the other beneficiaries?
Asked on Feb 04th, 2016 on Estate Litigation - California
More details to this question:
Our sister is the trustee of our parents estate. She sold our parents house to her daughter for well under market value. She also gifted her daughter her 1/4 of the profit from the sale. She refused to disperse the all the proceeds from the sale to the remain beneficiaries, holding back about 67k. When we hired an attorney she used all the 67k for her attorney. Is this legal? Her attorney knew the money was coming from trust account is it legal for them to accept. Some possibly important factors: Prior to the sale of the house we discovered she had taken 20k from a trust account and wevwere in the process of trying to have her removed as trustee. The house was the only remaining asset of the trust at the time of sale in an email the trustee promises to use all our remaining inheritance for legal fees if we take her to court.
1 ANSWER
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A trustee has a fiduciary duty to act in the best interest of all of the beneficiaries.
While a trustee can distribute her share of the trust assets to herself, she cannot do that if it is a detriment to the other beneficiaries. Also, while a trustee is entitled to hire an attorney to defend her as the trustee of the trust, she cannot hire an attorney that would completely deplete all of the trust assets.
Pigs get fat, hogs get slaughtered. It looks like the trustee took a little too much liberties in this trust.
Answered on Feb 06th, 2016 at 9:42 PM