What to do if my children have a testementary trust fund and I just found out that the trustee took all the money out and put it in her personal bank account?

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What to do if my children have a testementary trust fund and I just found out that the trustee took all the money out and put it in her personal bank account?

She did this 3 years ago but I just found out. She is willing to give money back, however I was wondering if I can file criminal charges against her for doing this?

Asked on May 21, 2013 under Estate Planning, Illinois

Answers:

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

Answered 8 years ago | Contributor

You can file criminal charges against the trustee for embezzlement.

You can also file a separate civil case (lawsuit) against the trustee for conversion.  Conversion is theft.  Your damages for conversion would be a forced sale (the amount that was taken by the trustee and the proceeds if those funds were used for example for purchases).

The trustee has committed a breach of trust.  Your damages should also include compensation for losses to the trust; for example, the trustee has a duty to invest and make the trust property productive.  When the funds were in the personal account of the trustee, the trust lost income because it lost investment opportunities.


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