Can a trustee use the trust money to purchase a house?

UPDATED: Oct 1, 2022

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Can a trustee use the trust money to purchase a house?

This is a trust of Charles Schwab account from my brother who passed
away left a trust to my Mom, sisters, and myself. His living wife is the

Asked on January 24, 2018 under Estate Planning, California


S.L,. Member, California Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

The trustee cannot use funds from the Trust to purchase a house.  This is a breach of the trustee's fiduciary duty.
The beneficiaries should sue the trustee for conversion which is theft in a civil case. The remedy is to seek a constructive trust.  A constructive trust will require the trustee to return the stolen funds or items purchased or the value of items purchased with the stolen funds to the Trust. A constructive trust can trace the stolen funds to items that were acquired with those funds.
If the Trust provisions provide for the removal of the trustee and appointment of a successor, those procedures should be followed.
If the Trust is silent on the removal of the trustee and appointment of a successor, the beneficiaries can petition the court for removal of the trustee and appointment of a successor.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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