Accounting ledgerThis is the second post in my series on disputing a trust in San Bernardino, California. My last article provided an overview of topics which I will be discussing and stressed the need to contact an attorney immediately if you are a beneficiary who believes your interests are not being protected. Contacting counsel sooner, rather than later, can help to ensure that the trust’s assets are not being wasted. In this article I will discuss an important topic – common claims made against a Trustee. By understanding the situations which lead to disputes one can better understand whether their interests are being protected.

San Bernardino trust administrators are often accused of “breach of trust”

There are many situations in which a San Bernardino Trustee will be found to be committing a breach of trust. A few examples include one’s self-dealing, profiting off of the trust, mismanagement of funds, or wasting of a trust’s assets. I will discuss these situations in turn.

It is, unfortunately, common for a Trustee to engage in self-dealing or to profit off of a trust. An example of self-dealing would be the Trustee selling a piece of property, below fair market value, to someone with whom the Trustee hopes to develop a future business relationship. This would likely constitute the Trustee valuing their own interests over those of the beneficiaries as would the Trustee selling an asset to him or herself just so that he or she may turn around and sell it for a profit. Other violations may include a Trustee’s gross mismanagement of funds, such as overpaying for necessary services or property. While less devious, such conduct would also be against the best interests of the beneficiaries and a violation of the Trustee’s responsibilities.

Another common claim made against Trustees is that they waste or do not fully utilize a trust’s assets. An example of not utilizing assets would be if the trust held a rental house which could be rented out for $2,000 per month and instead the Trustee rented it out for $500 per month. The Trustee has the responsibility of ensuring that the beneficiaries receive the full value of all assets and failing to do so may be a violation of California Probate Code §16047. Whether a Trustee is failing to receive full value for the Trust’s assets is always going to be fact specific and determined by viewing the situation as a whole.

San Bernardino trust administrators often fail to provide information to the beneficiaries as required by California law

Another common mistake by San Bernardino trust administrators is that they fail to timely provide information to the beneficiaries. Some Trustees may feel that they are “in charge” and that they do not have to give regular updates while some may simply be negligent in their duties. Regardless of the cause it is important to understand that the failure to provide updated information is a violation of one’s duties.

The Trustee is required to give information when requested by the beneficiaries in writing. Such information may include bank balances, copies of contracts, and other information related to assets of the Trust. It is typically required that such information be received within sixty days of the time that the beneficiary makes the written request. Also, the Trustee must provide an annual accounting of the Trust, unless the Trust provides otherwise. The beneficiaries may request a more frequent accounting but must be reasonable in doing so. Failing to meet these obligations can open a Trustee up to liability.

The above situations are just a few examples of situations in which Trustees violate their obligations to the beneficiaries of a Trust. If you believe that your interests are not being protected, then contact my office to speak with a San Bernardino trust dispute attorney. I also service Rancho Cucamonga, Fontana, Ontario, Victorville, Rialto, Hesperia, Chino, Upland, Apple Valley, Redlands, Highland, Colton, Yucaipa, Montclair, elsewhere in the Inland Empire, as well as Los Angeles.