QUESTION
Defrauding one of three trustees for personal gain
Asked on May 04th, 2016 on Trusts and Estates - California
More details to this question:
A house with only a $29,000 (initial) government loan was left in a trust to three sister. The sister (A) who was handling the trust charged one of the sisters (B) $400 month for over 7 years, plus what (B) assumed were property tax and insurance costs. (B has mental health issues and assumed her sister (A) was honest) Though (B) has lived in the house for over 50 years, (A) sold the house without her sisters consent for below market value after showing it to only one person (that she arranged for). It will close escrow the first week of June. What should (B) do? Who should she report it to? Thank you. (A concerned neighbor)
1 ANSWER
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I assume A is the sole trustee and A, B and C are all beneficiaries of the trust. A, as trustee, has the authority to sell the home, but has a fiduciary duty to all three beneficiaries. If B has possession of the home, then she may be charged rent for her use of the premises. If B doesn't want the house sold or thinks the sales price is too low, then she can petition the probate court to challenge the trustee's actions.
Answered on May 05th, 2016 at 6:39 PM