Full question:
I am the beneficiary(as is my brother ) of a marital trust set up by my father.As my stepmother was 25 years younger than my father,I was told by my father and his attorney,that a marital trust was the best way to hold on to the family properties as it would be impossible to pay the inheritance taxes on all the properties.This way,said Daddy,we would all be able to enjoy them.Well,not only has my stepmother not spoken to me since Daddy's funeral,but my once close brother has become heady with power.My brother and stepmother are both trustees ,along with aforementioned tax attorney.I live on a ranch in Wyoming(one I bought,not my fathers)and my brother is in S.C.Although I have asked the lawyer on the phone,and emailed my brother,that I have a right to an accounting of the trust,I have yet to get one,daddy died in 2004.They have sold off two of the 'family properties'without a word to me,never mind any money.Do I not have a right to sue them.I feel sure there has been some self dealing.
- Category: Trusts
- Date:
- State: South Carolina
Answer:
Trustees have specific legal responsibilities regarding the management of a trust, with the primary duty being loyalty. This duty prevents trustees from using trust property for their personal gain. They must act in good faith and manage the trust prudently.
If a trustee fails to fulfill these duties—such as acting disloyally or carelessly—they may be in breach of fiduciary duty. This constitutes an abuse of trust, and the trustee can be held accountable. It can be challenging to determine when an abuse of trust occurs because trustees have some discretion in their decision-making. However, if evidence shows that a trustee did not act with reasonable care or prudence, they may be liable.
Beneficiaries who believe their rights are not being protected or that the deceased's wishes are not being honored can file a claim against the trustee for breach of trust. Common scenarios of breach include:
- Mixing the trustee's personal finances with the trust's finances, which must be kept separate.
- Conflicts of interest where the trustee may act against the beneficiaries' best interests.
- The trustee failing to prevent a co-trustee from breaching trust.
To file a breach of trust claim, a beneficiary typically must do so within one year of the incident. If the court finds a breach, it may appoint a third party to ensure the beneficiary receives what they are entitled to from the trust. Depending on the breach's nature, the trustee may also be removed and ordered to pay compensation to affected beneficiaries.
In South Carolina, laws allow for the removal of a trustee who breaches trust (S.C. Code § 62-7-706). The court may remove a trustee for serious breaches, lack of cooperation, unfitness, or substantial changes in circumstances that affect the beneficiaries' interests.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.