A trustee manages assets held in a trust. In fact, a trustee has a fiduciary duty to act in the beneficiaries’ best interests. A fiduciary duty is the highest duty owed under the law.
If a trustee leaves inherited real estate vacant and derelict, this can have serious consequences. Here’s what you need to know.
Contact an abused beneficiary attorney in Los Angeles today to get the justice you deserve. Call (858) 209-2309.
The Trustee May Have Breached Their Fiduciary Duty
Managing trust assets is a key part of a trustee’s responsibility. This means preserving those assets so they don’t lose their value.
Leaving inherited property vacant, abandoning it, and allowing it to fall into disrepair is mismanagement.
Trust beneficiaries should be able to point to the property’s condition and lost rental income to show the trustee did not fulfill their obligations.
The Trustee Can Be Sued
Trust beneficiaries can sue the trustee for breach of fiduciary duty. If the beneficiaries can prove the trustee failed in their obligations, then they may be entitled to certain legal remedies.
Those remedies may include:
- A surcharge action: Beneficiaries can file a lawsuit against the trustee in probate court and can request a surcharge. A surcharge is a court order that would require the trustee to personally pay for losses they cause. In this case, that may be the lost market value of the property resulting from their failure to manage it with a reasonable degree of care. The trustee could be made to cover the cost of repairs made necessary because it was abandoned, as well as the lost market value due to its derelict state. The trustee may even be responsible for lost rental income.
- Reduction of compensation: If the trustee was supposed to receive compensation for managing the trust assets, the court may reduce the amount that they would have been entitled to or eliminate the fees owed to them entirely.
You will need evidence of the trustee’s failures and of the resulting losses you experienced in order to successfully make a claim to recover compensation.
The Trustee Can Be Removed
If beneficiaries are unhappy with the way the trustee is managing property, they don’t have to just sit back and let the mismanagement continue. They can file a petition asking the court to remove the trustee and replace them with someone different. They will need to prove there are grounds for removal. Valid grounds generally include things like:
- Extreme neglect of trust assets
- Wasting trust assets
- Failing to effectively manage the trust assets
If you can successfully petition to have the trustee removed, the court may have to appoint a new successor. If there was a successor trustee named in the original trust, that person would be appointed. If not, the court will appoint an appropriate party, which could be a professional independent fiduciary who can secure and rehabilitate the inherited real estate.
Contact An Attorney For Help
An experienced California estate litigation lawyer can help you if you are concerned about how a trustee is managing inherited property. Give Albertson & Davidson, LLP a call today at (858) 209-2309 to schedule a consultation and learn how we can fight for you.