Can a trustee be compelled to disclose financials?

What is the name of your state? INDIANA

My 14 year old nephew came to live with us in Nov. 2007, my husband and I were appointed his permanent guardians in Jan. 2008.

His mother passed away from cancer in 2002 (his fathers parental rights were terminated in mid 2007).

My sister-in-law is the trustee for the estate that was left to our nephew, who is the sole beneficiary. In accordance with the will, he is to receive the balance of the trust at the age of 30. No one in the family knows exactly what was left to him or what the current status is of the account. But there is speculation it was originally in the area of $300,000. Does he as a minor or us as his guardians have a legal right to know what was left to him?

Additionally, there is question as to whether there has been improper use of funds from the estate. We requested a copy of the beginning balance and current balance on the account. First call (6 weeks ago), a nervous response was - no problem. Second call (2 weeks ago), haven't had time to pull it. Third call (last night), its non of your *^%&!*$ business. This has only served to increase suspicion.

1. There was a house (paid off) in the estate which has sat empty for over 6 years. The sister-in-law's husband has a miscellaneous contruction work type business. They have been providing the routine maintence & lawncare on the house this whole time...seemingly drumming up issues to work on, tearing down privacy fence, remodeling, etc.

2. Three months ago, they decided to bring on a tenant in the house, but there is no indication as to where the rent money will go. They have also indicated to the tenant that they plan to sell the house in a couple of years.

3. Brother-in-laws construction business has been on the downward spiral. Approximately a year ago he his employees go. He has had several companies with the same purpose/different name in the past.

4. Sister-in-law doesn't work, yet they have taken three Colorado Skiing trips this year?

My greatest fear is what was intended for this child, who has been through more than one should have to, will be gone.

Is there an agency that can ensure for us that the funds are not being mis-used? I don't even care so much if we know the dollar amounts to our questions, as much as, I'm desperate to be sure they are not robbing this child.

Nothing has been spent from it related to the child. Not for his braces, we've been told, not for college, nothing.

We have 3 teenagers, and not much extra to pay attorney fees, etc. I would greatly appreciate any advice you can give.

I was a trustee of my Mothers trust and here are some obligations that go with it.

The trustee has several major duties:

Loyalty: The greatest duty is for the trustee to be loyal to the beneficiaries. The trustee must administer the trust solely for the benefit of the beneficiaries, and provide full disclosure of his or her dealings. The trustee must deal fairly with the beneficiaries, and not manage the trust to profit his or her own financial interests (i.e., by buying stock in a company the trustee owns).

Administration: The trustee has a positive obligation to do what is necessary for the good of the trust.

Earmark: The trustee must keep trust assets separate from all other assets, including those of the trustee, and must clearly identify those assets belonging to the trust in all dealings.

Account: The trustee must provide financial statements regarding the state of the trust.

Impartiality: The trustee must act for the benefit of the trust as a whole, and not favor one beneficiary's interests over another's.

If a trustee breaches his or her duties under the trust, the beneficiaries may sue him or her for any damages to their interests.

It would be unusual if the trust didn't provide some benefits for the child before the age of 30 (e.g., the right for the income to be spent on his needs, or the right to invade the priniciple in an emergency, etc). It's also odd that assets (the house) have not been liquidated.

Was your nephew with his dad prior to 2007, or with the sister-in-law? Were any funds ever disbursed for the child's benefit, ever?

You should consult with an attorney (an hour's consultation won't be expensive) to understand what the child's rights are. If he is entitled to see the trust, the attorney can draft an appropriate demand letter. Perhaps the lawyer who handled the guardianship can assist you ...

MD Conner: Thank you for your insight.

Texas Pooh:

The boy was with his dad only until about 2003, then he went to live with the sister-in-law on a temporary custody basis. (We offered to take him at that time) I don't think that she thought it would be for so long or that dad's rights would eventually be terminated, but she didn't want to make the permanent commitment.

I believe that the house has been kept in order to provide a revenue stream for the husbands business.

According to my sister-in-law, the nephew can't use any of the funds from the trust. Period. He gets that when he is 30. The Social Securty money he gets each month can be used for his needs.

I did ask her if she could pay off his braces before he came to live with us, and she said that she couldn't do that, I would have to pick up the $175 month payments until they were paid off. His braces were placed in 2006, we inherited $1400 bill on that, which we only have 2 more payments on.

When I asked about help with college, she said he would have to try for scholarships and there are always student loans available...I have a 17 year old and a 14 year old that is 6 months and one grade ahead of my nephew. Our total household income is $75,000 a year and the thought of all of this is at once is overwhelming.

I plan to contact an attorney today. Thank you for your help!

According to my sister-in-law, the nephew can't use any of the funds from the trust.

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This is telling me that neither the nephew nor you have a copy of the trust document. If that is correct, demand a copy in addition to an accounting. While it is possible and perfectly acceptable for a trust to deny access to funds until some time in the future, it seems odd that there would not be provisions allowing distributions for items like higher education.

Good luck and hope you get to the bottom of this.

(By the way, this is why you should not double post. You get responses to both posts, but the responders may not see the entire background, other responses, and your clarifications.)

When the trust was set up, the father's intentions may have been to only provide money for the son to live on after he became an adult, and not necessarily to pay for college or anything else but it would have been nice if he would have granted partial access to the funds before then--you will just have to wait and see what the trust says specifically.

Your attorney will also need to ask the sister-in-law if she had power of attorney granted to her by her father before he died. If so, then she could have gotten access to large amounts of money supposedly to help care for him that she may have kept for herself. She will most likely need to produce an accounting with receipts to prove she spent this money on her father's care or else be accused of abuse of POA/elderly financial abuse if she doesn't provide the accounting. Let's hope she didn't use the POA to change beneficiary designations on some of the assets, which may be illegal.

The beneficiary also has the right to ask for copies of estate and trust state and federal tax returns.

DANDY DON IN OKLAHOMA ([email protected])

Hopefully, the poster is acquiring records she was told by me to obtain. I also told her that both her threads would be read.

Dandy Don said:

When the trust was set up, the father's intentions may have been to only provide money for the son to live on after he became an adult, and not necessarily to pay for college or anything else but it would have been nice if he would have granted partial access to the funds before then--you will just have to wait and see what the trust says specifically.

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The father was stripped of his parental rights.

Originally Posted by Dandy Don
Your attorney will also need to ask the sister-in-law if she had power of attorney granted to her by her father before he died. If so, then she could have gotten access to large amounts of money supposedly to help care for him that she may have kept for herself. She will most likely need to produce an accounting with receipts to prove she spent this money on her father's care or else be accused of abuse of POA/elderly financial abuse if she doesn't provide the accounting. Let's hope she didn't use the POA to change beneficiary designations on some of the assets, which may be illegal.

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Since the beneficiary is a minor, it's not likely elder abuse applies here.

Originally Posted by Dandy Don
The beneficiary also has the right to ask for copies of estate and trust state and federal tax returns.

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The beneficiary is a minor; therefore, the guardian is who asks for/acquires copies of the estate, trust, & tax returns.

From the OP's other thread:

Originally Posted by Dandy Don
As guardian, you may not be technically eligible to ask for the copy of the trust--the request may need to come from the beneficiary himself or his authorized representative.

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Since when is a guardian not an authorized representative?

You are the only person mistakenly referring to the minor beneficiary, as I never alleged that. It's elder financial abuse by the sister-in-law against the MOTHER.

Dandy Don said:

You are the only person mistakenly referring to the minor beneficiary, as I never alleged that. It's elder financial abuse by the sister-in-law against the MOTHER.

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Say what? The MOTHER passed away in 2002. And there is no evidence that she was elderly, abused financially, or granted a POA to anybody.

Dandy Don said:

You are the only person mistakenly referring to the minor beneficiary, as I never alleged that..

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Let's see how my mistake was made regarding the minor as a beneficiary.

Originally Posted by singagospelsong

My 14 year old nephew came to live with us in Nov. 2007, my husband and I were appointed his permanent guardians in Jan. 2008.

His mother passed away from cancer in 2002 (his fathers parental rights were terminated in mid 2007).

My sister-in-law is the trustee for the estate that was left to our nephew, who is the sole beneficiary.

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'Nuff said.

Originally Posted by Dandy Don
It's elder financial abuse by the sister-in-law against the MOTHER.

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Originally Posted by anteater
Say what? The MOTHER passed away in 2002. And there is no evidence that she was elderly, abused financially, or granted a POA to anybody

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The beneficiary was 8-9 years old when his mother died.

Can someone please point out exactly where the OP stated that the deceased minor's mother was elderly, granted a POA to the sister-in-law (the minor's father's sister), and that elder abuse occurred?

Looks like you didn't see that either, anteater.

Perhaps DD is psychic.

Anteater, please send me one of them there tin clairvoyant helmets to shield these hot & brutal summer rays down here. Mine's missing in action from being moved so much.