PLEASE NOTE: To protect your safety in response to the threats of COVID-19, we are offering our clients the ability to meet with us in person, via telephone or through video conferencing. Please call our office to discuss your options. 

Lins Law Group, P.A.

Get Out Ahead Of Your Issue
— Call Us Today


Planning. Preparation. And Acting With Purposeful Intent.

The reasons to remove and sue a trustee

On Behalf of | Oct 22, 2021 | Estate Planning |

A trustee has important duties overseeing assets within a trust. Tasks include paying taxes, following the trust’s terms and providing regular distributions to beneficiaries.

However, sometimes, a trustee may neglect those and other duties, placing his or her interests above those of the trust. When this occurs, it is time to remove the trustee and pursue a lawsuit.

Embezzlement and conflict of interest

Here are some of the reasons that you may sue a trustee and have them removed:

  • Embezzling or mismanaging the assets: The trustee may be making personal investments with the money that he or she must be prudently administering.
  • Engaging in self-dealing and other conflicts of interest: This may occur if the trustee uses the money for a personal loan or transfers money to a disqualified person. It is a no-no to use the trust’s money to gain personal advantage.
  • Neglecting to provide accurate records on trust accounting: Maintaining thorough records are necessary regarding taxes, distributions to beneficiaries, investments made, along with gains and losses of the trust’s assets. Request records on a regular basis.
  • Making late tax payments: This is to the detriment of the trust. The IRS imposes interest and penalties on unpaid taxes and for failing to file them. This may be a sign of negligence or fraud.
  • Displaying preference among beneficiaries: Perhaps the trustee is doling out more money to a certain beneficiary than another.
  • Failing to distribute trust assets: This represents a breach of fiduciary duty and is a sign that deceitful behavior is taking place.

Great care likely occurred when the grantor – the person who created the trust – named the trustee. However, the grantor did not envision complications from a dishonest trustee.

Protecting the trust from mismanagement

A lawsuit may be your best option when dealing with a trustee’s mismanagement. The trust must be protected, and you, as a beneficiary can protect it from a dishonest and careless trustee.


FindLaw Network