What steps are needed to sue a Trustee for breach of fiduciary duty?
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What steps are needed to sue a Trustee for breach of fiduciary duty?
The Trustee has had full control of the Trust for 3 years. The Trust started with a balance of #232,632.88 and has 4 equal beneficiaries I am one of them. The funds are held in a money market account and a checking account. The Trustee is required, by court order, to provide the beneficiaries with account statements every 3 months, and a yearly accounting. Sometimes bank statements are provided quarterly, and sometimes just a bank screenshot is provided, a yearly accounting has never been provided. Numerous checks have been written with no mention of what the checks were written for or to whom they were written. When I have asked
the Trustee questions on where the money is going I have never received an answer. The Trust now has only $153,312.33. This Trust should be making a small amount of money each year but instead, it now has $79,320.55 less than 3 years ago.
Asked on May 29, 2019 under Estate Planning, Arizona
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 5 years ago | Contributor
You can file a type of lawsuit in county court (generally in the part or section of county court called the chancery or equity division, part, or court) traditionally called an action "for an accounting." In this action, as the name implies, you ask the court to make the trustee account for his or her managment of the trust: that he or she is following the terms or instructions of the trust; is being loyal to the beneficiaries; is not engaged in "self dealing" or putting his/her own interests ahead of the beneficiaries; and is using reasonble care in managing the trust. If the court finds that a trustee is violating one or more of these duties, it can order the trustee to do or not do certain things; possibly to repay money diverted or wasted or lost from the trustee; and/or can replace the trustee.
This type of legal action is significantly more complex procedurally than, say, a small claims case; you are strongly advised to retain an attorney to help you.
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