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revocable trust - trustees won't provide accounting

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celestialSeas

Junior Member
What is the name of your state? California
I'm the beneficiary of a trust and the trustees refuse to give me an accounting of assets. I'm sure there is wrongdoing: they have given away the use of trust assets, vehicles,etc. They claim they are not required to give me an accounting because the settlor is still alive. true, but the settlor has severe dementia and resides in an alzheimer home. To claim that they are following the wishes of the settlor in these gifts to non-benificiaries (their children) defies contemplation. How shold I proceed?
 


BlondiePB

Senior Member
What is the name of your state? California
I'm the beneficiary of a trust and the trustees refuse to give me an accounting of assets. I'm sure there is wrongdoing: they have given away the use of trust assets, vehicles,etc. They claim they are not required to give me an accounting because the settlor is still alive. true, but the settlor has severe dementia and resides in an alzheimer home. To claim that they are following the wishes of the settlor in these gifts to non-benificiaries (their children) defies contemplation. How shold I proceed?
Until the settlor dies, you are not entitled to anything (including an accounting).
 

celestialSeas

Junior Member
I was looking for an answer/solution, but since you brought it up...

If someone is incompetent and not in charge of their affairs, how can they be instructing the trustee on how to handle their assets?

For example if Z is the guardian of a retarded/incompetent/mentally handicapped adult, A, and Z gives A's vehicle to Z's daughter doesn't this constitute theft from A?

But, back to my original question. If anyone is familiar with CA Trust Law-- I keep reading (in online articles) that for both revocable/irrevocable trusts that at least annual accounting is required by law... It seems unreasonable that a trustee would have the ability to transfer assets to non-beneficiaries and not have to account for that and can justify their behavior by saying, "That's what the settlor wants." Even though the settlor is confined to an Alzheimer's home and doesn't know what day it is or even where they are.
 

curb1

Senior Member
CelestialSeas,
The Trustees have to be following the instructions in the Trust. They might have to sell some assets to pay for the care of the affected person. There is a possibility that all assets will be sold by the time the person dies.
 
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Dandy Don

Senior Member
You are right to be concerned since this appears to be self-dealing, especially if the trustees are related to the settlor (they are related, right? Exactly how are they related?).

You will not be eligible to receive a copy of the trust until the settlor dies, and you do that by sending the trustee (or asking your attorney to write the letter to the trustee on your behalf, so that it will be less likely to be ignored if the letter came just from you) a certified letter asking for a copy of the trust and an accounting for each year the trust has been in existence, as well as tax returns.

You can't automatically assume that anything improper is occurring because you don't have definitive proof yet, but this is worth looking into by your trust attorney after the settlor's death occurs. You may even want to consult a trust attorney now just for purposes of consultation only, to see if there is anything you can do to protect your interests, such as asking a court to require the trustees to post a trustees bond (even if the trust specifically exempts that requirement) if there is evidence of inappropriate financial activity. It is possible that the trustees might somehow also have gotten power of attorney that would give them authority to handle certain assets if there is also a last will and testament, but if they don't have POA and if the trust doesn't permit them to make the gifts to the children that you said were made, then trustee could face charges of breach of fiduciary duty or worse, depending on exactly what they have done.

DANDY DON IN OKLAHOMA ([email protected])
 

tranquility

Senior Member
You are not due an accounting because you are not yet a beneficiary who has that right. To see beneficiaries rights in this manner, see CA Probate code 15800. If the the person who has the power to revoke is declared incompetent, the beneficiaries then can get the accounting. However, it depends on the powers the courts give the conservator and/or the successor trustee and we would need to know all those facts before guessing if the OP has any rights if the trustor is incompetent.
 

BlondiePB

Senior Member
You are right to be concerned since this appears to be self-dealing, especially if the trustees are related to the settlor (they are related, right? Exactly how are they related?).
Appears to be self-dealing? You know that what appears to be self-dealing is the trustees doing exactly what they are supposed to be doing (i.e. selling assests to pay for the settlors care)?
Originally Posted by Dandy Don
You can't automatically assume that anything improper is occurring because you don't have definitive proof yet, but this is worth looking into by your trust attorney after the settlor's death occurs. You may even want to consult a trust attorney now just for purposes of consultation only, to see if there is anything you can do to protect your interests, such as asking a court to require the trustees to post a trustees bond (even if the trust specifically exempts that requirement) if there is evidence of inappropriate financial activity.
Until the settlor dies, there are no interests for the OP. Just how is the OP going to obtain evidence of inappropriate financial activity when the settlor is alive?
Originally Posted by Dandy Don
It is possible that the trustees might somehow also have gotten power of attorney that would give them authority to handle certain assets if there is also a last will and testament, but if they don't have POA and if the trust doesn't permit them to make the gifts to the children that you said were made, then trustee could face charges of breach of fiduciary duty or worse, depending on exactly what they have done.
Oh, brother... Care to explain how any POA has the power access trust assets?
 

tranquility

Senior Member
Until the settlor dies, there are no interests for the OP. Just how is the OP going to obtain evidence of inappropriate financial activity when the settlor is alive?
While I agree with the general tone of BlondePB's post regarding the possibility of remedies in this situation, the CA Probate code does allow certain protections in some situatuations. From the OP's post, I believe the settlor is different from the trustee in this case. I think a contingent beneficiary has some rights even if the trust is still revocable. Even though probate tends to be legal, there are some equitable remedies (like the court requiring a bond) if the situation arises where the court feels it necessary.

That does not mean it would not be a hard, long and expensive fight or that the OP's situation remotely fits. It's just that I believe it's possible--if the OP *were* to obtain evidence in some way.
 

celestialSeas

Junior Member
Rather than a hypothetical situation, how about the actual situation.

There are 4 beneficiaries to an A/B trust set up in CA. One trustee-beneficiary for trust A is providing housing for trust B's trustee-beneficiary's non-beneficiary daughter. The daughter does no service for the trust. When questioned why the non-beneficiary would be entitled to this gift, trustee-beneficiary for trust A claims, "That's what the settlor desires."

The settlor, though not declared legally incapacitated, lives in an advance-stage Alzheimer's facility and has had dementia going back years. About 4 years ago the trustees took away the settlor's driver's license, access to cash & credit cards, and check book.

My argument is that the trust is misusing assets by gifting them to non-beneficiaries and to claim the settlor has knowledge of this or is part of the decision-making process defies contemplation.

Also, if the trustee-beneficiary is gifting assets including vehicles and jewelry to both beneficiaries and non-beneficiaries in the name of a settlor with severe Alzheimers, doesn't it constitute theft from an at-risk person?
 

Dandy Don

Senior Member
Consult an attorney immediately. This might even be considered elderly financial abuse. The trust alone doesn't give them legal authority to handle the credit cards, cash and checkbook, and the trust itself might not even be valid if it was signed during a time that this person was officially suffering from dementia or diminished mental capacity. Someone needs to get guardianship officially to have authority.
 

celestialSeas

Junior Member
Consult an attorney immediately. This might even be considered elderly financial abuse. The trust alone doesn't give them legal authority to handle the credit cards, cash and checkbook, and the trust itself might not even be valid if it was signed during a time that this person was officially suffering from dementia or diminished mental capacity. Someone needs to get guardianship officially to have authority.
Wow! thats the free legal advice? get an attorney? I tried it can't be done because of jurisdictional issues. the trust is in California but the trustees live in different states, if I get an attorney in Ca he would say I need to get an attorney in Ohio and Arizona but then the trust would be out of their jurisdiction as well, the legal system is a shocking sad failure in this regard. I contacted Adult protective services in Ohio where my mother currently resides with my sister/trustee and APS is even more restricted, to their credit they were able to determine she was being adequately cared for,but could do nothing about financial abuse because of jurisdictional issues its really sad that my Mom has to live like a poor shut in, who is fearful of being placed in a home. My parents always intended to live out their days in the desert, Ohio was never their home, no one in the family ever had any business or other interests there, there are no special medical treatments available only there or other reason for my Mom to be there accept for my sister to retain her control.
 

tecate

Member
You never said one word about Ohio being the state where all of the action would take place. But now we know. So what's stopping you from seeking the equivalent of a conservatorship in Ohio for your mother? Do it yourself if you don't want to hire an attorney. Fight your siblings! If you are successful, once you have letters, you should have control over the trust that is revocable. And then you can fight them again to recover what you think should be recovered.

This is a DIY website, but for situations headed for litigation like this one, I don't blame Dandy Don for suggesting you hire an attorney. At least you now know that one state's law doesn't apply to another, and that the California attorney you spoke with can't help because he or she doesn't practice law in Ohio.

My learned colleagues gave you good advice assuming all the action would take place in California, not Ohio. So don't get short with them just because you didn't know.

If you are lucky, someone familiar with Ohio law might chime in.
 

celestialSeas

Junior Member
What is a Conservatorship?

You never said one word about Ohio being the state where all of the action would take place. But now we know. So what's stopping you from seeking the equivalent of a conservatorship in Ohio for your mother? Do it yourself if you don't want to hire an attorney. Fight your siblings! If you are successful, once you have letters, you should have control over the trust that is revocable. And then you can fight them again to recover what you think should be recovered.

This is a DIY website, but for situations headed for litigation like this one, I don't blame Dandy Don for suggesting you hire an attorney. At least you now know that one state's law doesn't apply to another, and that the California attorney you spoke with can't help because he or she doesn't practice law in Ohio.

My learned colleagues gave you good advice assuming all the action would take place in California, not Ohio. So don't get short with them just because you didn't know.

If you are lucky, someone familiar with Ohio law might chime in.
Don't get me wrong-- I appreciate any advice I can get...I try to see the humor in everything.

What would getting a conservatorship entail? And what is it, exactly?

I have learned that the system is pretty easily defeated when people move out of state and take the settlor out of state, etc. There are a lot of costs associated with fighting an out of state, multiple state fight. I'm an old man myself, it's hard to justify spending the next 5 years in court. Shame on the legal system for allowing people to lose their inheritance so easily.
 

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