What is the penalty for the breach of fiduciary duty and misappropriation of trust funds by a trustee?

Question Details:I am 1 of 3 named beneficiaries in our deceased mother's revocable living trust. Estranged sibling is trustee and refuses to account or disburse my 1/3 share ($120K) of trust funds from the sale of the trust property. I sent them trustee a certified letter requesting disbursement and an accounting, but he does not respond. Is this considered embezzlement, fraud, or a felony? I am currently seeking an attorney, but would appreciate clarification on what the trustee is likely to be charged with and if he will be ordered to pay the money owed to me. I need a trust and estates attorney. I'm in Virginia Beach Virginia.

Asked 4 years ago under Wills, Trusts, Probate | 8976 Views | More Legal Topics

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S.L,. Member, California Bar | FreeAdvice Contributing Attorney Answered 4 years ago

As a beneficiary, you can sue the trustee for breach of trust (breach of fiduciary duty).  Your lawsuit should seek damages in the amount of the misappropriated funds plus interest.  If damages are an inadequate remedy, an equitable remedy such as constructive trust would be applicable.  A constructive trust would require the trustee to return the misappropriated funds.

The trustee's duties should be set forth in the particular trust in which you are a beneficiary.  There may be provisions for specific remedies in the event the trustee commits a breach of trust, breach of fiduciary duty, etc.  In addition, the trust probably has a designated successor trustee when the current trustee is removed.  The procedure for removal of the trustee should also be set forth in the trust provisions.

In addition to the above civil remedies, you could contact the district attorney's office to see if they will pursue criminal prosecution for embezzlement against the trustee.  The criminal case would be separate from your lawsuit (civil case).

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