Written by Trustees exert significant power over a trust’s assets, and when they misuse this control, the consequences can be dire. Misconduct can take many forms, but some common types can harm beneficiaries. Here are some examples:
Mismanagement Of Assets: When trustees make poor investment decisions or fail to diversify the asset portfolio, they put the trust’s value at risk. This undermines their fiduciary duties since their actions can lead to substantial financial losses for you.
Self-Dealing: Trustees may misuse their position to benefit personally by making loans to themselves or purchasing assets at below-market rates. These actions violate their duty to act in your best interests.
Lack Of Transparency: If a trustee withholds information or fails to provide timely updates, it raises serious concerns about their management practices. Transparency is vital to maintaining trust and handle assets properly.
Improper Distributions: Delaying or denying distributions without a valid reason can cause financial hardship for beneficiaries who depend on those funds. This violates the trust’s terms and undermines financial security.
Recognizing common forms of trustee misconduct is the first step in protecting your interests. However, it’s equally important to take anticipatory measures to prevent these issues from arising. You can take critical preventative measures to minimize the risk of trustee misconduct.
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