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If an attorney is the trustee of a trust and takes money out without the knowledge of the beneficiary, what are the consequences
Anonymous2 views3 answers
The trustee wrote checks from the trust to himself. In the Trust agreement, it is expressly stated that he cannot do that. It is my understanding that this is a breach of his fiduciary duty. If I decide to seek legal action, could that result in his being disbarred?
A trustee may not make a make a loan from Trust assets to himself unless that is specifically allowed under the terms of the trust. If the trust did not allow it, this action is certainly grounds for demanding an account and having him removed as trustee. Unless the Trust somehow gives you or someone else the power to remove him, you would need to file a petition in the Probate Court to get rid of him.
Unless the behavior is really egregious, I don't think the Probate Court would normally report the lawyer to the Board of Bar Overseers; however, that does not mean that you can't.
A trustee has the ability to pay himself reasonable fees for trust management, and less commonly if a purchase for the benefit of the trust needs to be made by cash/credit card and he has receipts and reimburses himself...not ideal but it happens. In all other cases it is likely to be improper. Taking civil legal action by itself won't automatically cause his license to be revoked, but if a complaint was made to the Board of Bar Overseers or their was a criminal conviction for fraud, that result is a serious possibility.
If you want more information, you should ask for a status conference with the local Probate & Family Court to get some answers. An attorney may be beneficial in evaluating whatever answers you get.
Eric Jerome GoldTrusts AttorneyCalabasas, CACA licensed ·
The trustee of a trust may, depending on the trust documents itself, withdraw funds as compensation for service. If this particular withdrawal was not for compensation, but a loan to the trustee, that is likely to be considered a breach of the trustee's fiduciary duty.
You can, and should, at this point retain your own independent counsel to review the situation and the trust to determine the extent of the issue and provide you with fact specific direction. The trustee can probably removed from the position and replaced. Depending on the facts, there will likely be personal liability and possibly criminal liability. As for having the trustee disbarred, the MA State Bar would have to make that decision.
