What if we suspect a trustee is mismanaging a trust?

1 answer | Last updated: Nov 28, 2016
A fellow caregiver asked...

My husband’s brother is executor of my father-in-law's trust. He spends $2,500 per month on my father-in-law's credit cards and has spent $50,000 to date in legal fees trying to get custody of his daughter that came from his brief marriage. Our father-in-law has approved these expenses. My father-in-law also pays private health insurance for this child, his granddaughter. There is a zealous religious belief between my father-in-law and my brother-in-law that in their eyes justifies these expenses. Our questions are: Doesn’t the trustee have a fiduciary responsibility to protect the interests of the other beneficiaries? Can we prove elder abuse in this case?

Expert Answers

Barbara Repa, a Caring.com senior editor, is an attorney, a journalist specializing in aging issues, and the author of Your Rights in the Workplace (Nolo), now in its 10th edition.

You are living proof of a difficult truth: Money and aging and the fear of death can disrupt the peace in families that seemed to operate as lovingly as the Waltons -- and can quickly bring out the worst in a family with even the slightest dysfunctional tendencies.

For better or for worse, it sounds as if your father-in-law and brother-in-law have formed an emotional bond based on shared beliefs and experience -- and from a realistic standpoint, there may be little you can do to change that. Another reality is that your father-in-law has the right to spend his own money as he wishes during his lifetime.

But to deal with your concerns from a legal standpoint, your first order of business may be to sort out exactly what your brother-in-law has been authorized to do. If your father-in-law is still cogent and able to make his own decisions, as it seems you have described, then it would be unusual -- although not impossible -- for your brother-in-law to be empowered to act as trustee for a trust operating during his father's lifetime. And if the trust is now in effect, and your brother-in-law is the trustee, it is likely that your father-in-law is the beneficiary.

So the legal concern would be whether your brother-in-law is acting in your father-in-law's best interests, rather than any secondary beneficiaries such as other siblings, who might stand to take trust property down the line. Courts generally only intervene in a trust's administration if there is a clear claim that the trustee has mishandled the trust property. And trustees are absolutely forbidden by law from using the trust property solely for their own benefit.

If you are truly concerned that your brother-in-law is financially abusing your father-in-law, contact the Adult Protective Services agency in your area for help. You can discuss your concerns first on the hotline and locate a local agency if need be though the website run by the National Center on Elder Abuse .