Don’t ignore suspicions that a trustee is misusing trust assets and funds in Maryland. Our attorneys can help you take the necessary steps to protect your interests as a beneficiary, including removing the trustee who has abused their role as a fiduciary.
Almost immediately, our attorneys can request an accounting report for the trust on your behalf. This is your right as a beneficiary in Maryland, and the trustee is required to comply. Non-compliance could indicate misappropriation and other misuse, as can trust accounting reports with missing or inaccurate information. Trustees misuse assets by engaging in self-dealing, showing favoritism to certain beneficiaries, and making unwise investments. Any breaches of fiduciary duty can lead to the trustee’s permanent removal.
For help from the Heyman Law Firm, please call our Baltimore fiduciary litigation attorneys at (410) 305-9287 about your case.
What Should You Do if a Trustee Misuses Trust Assets in Maryland?
One of the first things you should do if you suspect a trustee of misusing trust assets is to let our lawyers request what’s known as an “accounting” of the trust. As a beneficiary, you have the right to request a detailed accounting of the trust’s activities, assets, distributions, investments, and more whenever you want under Md. Code, Ests. & Trs. Art., § 14-405(j)(1)(ii).
The trustee has a duty to provide an accounting upon request. An accurate accounting may indicate how the trustee has been misusing trust assets. We can also confirm inaccurate accountings by identifying suspicions transactions or a lack of information. If the trustee ignores our request for an accounting, we can file a petition with the court to compel the trustee to provide an accounting.
You should not ignore signs or suspicions that a trustee is misusing trust assets. Though the trustee may be a relative or someone else close to you, a beneficiary of the trust, they have a fiduciary duty to you as the trustee. Violating this duty puts your equitable interest at risk, so you should first have our Maryland fiduciary litigation attorneys request an accounting if you suspect misuse, as is your right.
Can You Get a Trustee Removed for Misusing Trust Assets in Maryland?
Suppose accounting documents or other evidence reveal that a trustee has been misusing assets to benefit themselves or others, violating their fiduciary duty. In that case, our lawyers may seek to have them removed from their position. Being a trustee is a large responsibility. Abusing that role can result in permanent removal by a Maryland probate judge.
To get a trustee removed, we must file a petition with the probate court. Our lawyers can provide detailed accounts of exactly how the trustee abused trust assets, such as through self-dealing or other improper actions.
If the previous trustee is removed, another person must take their place. Trust documents may name a “successor trustee,” who takes over the role if the original trustee is removed or otherwise unavailable. If the trust does not identify a successor trustee, the probate court will appoint one to serve in that capacity.
Judges can remove trustees for any reason listed under § 15-112, including any failure to administer the estate competently.
What Helps Prove a Trustee Misused Trust Assets?
In addition to an accounting of the trust, which may provide a relatively clear picture of the trustee’s activity, we may need more evidence to prove the misuse of trust assets. Let us build a strong case that convinces the probate court to remove the trustee and permanently protect your equitable interest in the trust.
Our attorneys may get court approval to obtain the trustee’s personal financial information. Personal bank and investment account information can confirm unauthorized distributions to a trustee. Documents proving that asset ownership was transferred from the trust to the individual trustee against the trust’s wishes are also strong evidence of misuse.
Beneficiaries may also give statements about distribution discrepancies, poor communication, evading questions, refusal to provide accounting documents, and other information that convinces the probate judge the trustee is unfit for the responsibility and should be removed.
What Are Examples of Trustees Misusing Trust Assets?
Trustees misuse trust assets and abuse their roles in various ways, and our attorneys can help beneficiaries dealing with any failures from a fiduciary.
Self-Dealing
Self-dealing is one of the most common examples of trustees misusing trust assets. The trustee owes beneficiaries a fiduciary duty and violates that duty by acting with their personal interests in mind, rather than the interests of the beneficiaries. Self-dealing includes making unauthorized distributions to personal accounts, transferring asset ownership to themselves, and even buying and selling assets without authorization for their own benefit. Self-dealing takes many forms, so contact our lawyers to determine if the trustee’s conduct is improper.
Favoritism
Trustees misuse trust assets when they show favoritism in distributing assets to beneficiaries. Trustees must adhere to the distribution guidelines outlined in the trust documents. They don’t get to decide who gets what or how much; they must follow the trust’s instructions exactly. Showing favoritism to certain beneficiaries over others and inflating their distributions constitutes a breach of fiduciary duty, which beneficiaries should address immediately with our help.
Bad Investments
Fiduciaries who take excessive risks regarding trust investments may not be fit for this massive responsibility. Ill-advised investments can result in substantial losses for trusts, potentially affecting the equitable interests of beneficiaries. Using the trust to make investments where there is a conflict of interest is also grounds for removing the trustee.
Poor Bookkeeping
Trustees mishandle trusts and their assets when they fail to maintain thorough financial records. This can lead to a whole host of issues, and we can help beneficiaries address such unfit trustees.
Call Us if a Trustee Misuses Trust Assets in Maryland
For help with your case from the Heyman Law Firm, call our Maryland fiduciary litigation attorneys at (410) 305-9287.