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The trustee has stolen $100,000 from my children's trust. What can I do? What are my chances of recovering the funds?

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My husband passed 6 years ago, leaving a trust worth $100,000 to our two children. The trustee is my deceased husband's sister. As our children will be going to college soon, I inquired as to the status of the trust assets. The trustee was non-responsive, but upon pressing, she admitted to having spent the trust's assets entirely on personal expenditures.
Six months later, she continues paying lip service on her intention to return the assets, but nothing more. I demanded a full accounting as a first step, which she ignored. I then hired an attorney who filed a motion asking the probate court to demand an accounting. The court demanded she comply within two months. She ignored that too (didn't even show up to court). The judge did nothing but repeat the demand and gave her another two months.
What should be my next step?

4 Attorney Answers

Best Answer
Consult with your attorney regarding the next step, because you want to ultimately sue her on behalf of the beneficiaries for her misconduct. It does not sound, however, like she is going to voluntarily repay the trust, but that should not deter you from going after her. Judgments in California are good for 10 years and then can be renewed every decade. So she may have assets you can attach or bank accounts you can execute on. This may also be a debt that is deemed non-dischargeable in bankruptcy. I would not let her get away with stealing the beneficiaries' money.
Best Answer
Consult with your trust and estates litigation attorney to help you pursue an action against the trustee. Your chances of recovery partially depend on the value of personal assets the trustee has.
Best Answer
Sue her for breach of fiduciary duties. She has been self dealing. Ask for an accounting in your lawsuit. If she has a home or other assets you can use those to recover the trust funds. She can file bankruptcy, but the kind of willful misconduct you are describing is not dischargeable in bankruptcy.
Best Answer
Your children or you should hire an attorney immediately and file a petition for removal of trustee. From there, sue her for breach of fiduciary duties (specifically loyalty). Through this course of action you may be able to recover damages, depending on all of the facts being considered of course.

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