If a successor trustee of an irrevocable trust transferred money from the trust fund to his own corporation. is it called “breach”?
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If a successor trustee of an irrevocable trust transferred money from the trust fund to his own corporation. is it called “breach”?
I found it from bank statement that the successor trustee transferred a fund from trust account to his own corporation. He said it is a loan to his company. He’ll pay interest to benefit the trust fund. I want him to give the money back. What should I do?
Asked on January 16, 2012 under Estate Planning, California
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
If you discovered a receipt that the successor trustee loaned money from the trust fund to his own corporation without notifying the beneficiaries of the trust, you need to carefully read the trust agreement to see if such conduct was allowed. Most likely it is not.
I suggest that if the loan was not authorized, the trustee immediately repay it back to the trustee. If he or she refuses to return the money to the trust, I suggest you immediately consult with a Wills and trust attorney about the situation in that from what you have written, it seems that the successor trustee breached his or her fiduciary duty under the trust to the beneficiaries.
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