Trustees Have a Duty to Account (No Matter What)

Our Trust and Estate Litigation Lawyers located in Lynnfield, Greater Boston, Massachusetts are responding to a question concerning whether trustees of irrevocable trusts, revocable trusts, realty trusts, special needs trusts, and charitable trusts trusts can be relieved from a duty to account to beneficiaries. The Law Office of Stefan Cencarik, PLLC represents beneficiaries and trustees of Massachusetts trusts and estates, and serves clients in the greater Boston area and Eastern Massachusetts. 

Trust instruments sometimes contain clauses that state that the Trustee of the trust is under no duty to account to any beneficiaries.  Other (limited) accounting clauses provide the trustee with complete discretion to determine whether he/she should account to beneficiaries. These clauses were presumably placed into the agreement by the trust settlor (person who set up the trust) so as to maintain the secrecy of the financial affairs of the trust, and to eliminate the administrative burdens on the trustee if required to account.   

Most modern trust instruments will contain an independent paragraph that obligates the trustee of the trust to account to the beneficiaries once per year.  This accounting will provide the beneficiaries with information on the types and amounts of property held by the trust, income earned, and expenses incurred by the trust.  This will help the beneficiaries determine whether the trust has been managed in their best interests. Most estate planning lawyers will recommend or automatically include an accounting provision in trust, absent some of the interests described above.  

In the instance that the trust relieves the trustee from any duty to account, beneficiaries are not left completely in the dark as to the financial affairs of the trust.  Massachusetts Courts have established the basic principal that trustees of a trust have a duty to account for trust property and can be compelled to do so upon request to Court that has proper jurisdiction.  Massachusetts Courts have held that any trust clauses that relieve trustees of accounting duties are against public policy.  Therefore, trust beneficiaries seeking to determine whether a trustee has properly and adequately performed their duties may retain a trust and estate lawyer to request that a Court compel the trustee to account.  Then, the beneficiaries and trust litigation attorney can determine whether the beneficiaries may pursue any other remedies against the trustee for mismanagement of the trust.  

If you are a beneficiary of a trust and a trustee has ignored, stalled, delayed and/or refused to account to you, please contact the Law Office of Stefan Cencarik, PLLC at 781-463-6063. We represent aggrieved trust beneficiaries throughout Eastern Massachusetts.  

What Can I Expect if a Trustee Breaches a Trust?

Our Trust Litigation Attorneys located in Lynnfield and serving all of Eastern Massachusetts are responding to the following question: What can I expect if a trustee breaches a trust? 

If a trustee of a trust has breached the trust, beneficiaries may seek various equitable remedies through the Massachusetts Superior Courts and Probate Courts.  "Remedies" provide beneficiaries with a means to be placed into the position that they would have been if the trustee had not breached the trust in the first place. Or remedies will provide the beneficiaries with an order compelling the trustee to take action, such as abiding by trust terms.  There are also other discretionary remedies such as removal of trustee. The following article describes some of the equitable remedies available against Massachusetts trustees who breach their duties to beneficiaries or charitable purposes: 

- If a Trustee causes a loss in income to the trust, then the beneficiaries may request that a court surcharge trustee (make the trustee responsible for repayment of the losses to the trust). In these cases, if a trustee fails to obtain income, capital gains, appreciation or foregoes lucrative opportunities, then the trust would be entitled to restitution from the trustee.  In the case that a Trustee personally benefited financially from any loss to the trust, the beneficiaries could also seek to disgorge the trustee of those gains.

- A trustee may be ordered to account to the beneficiaries for all income, losses, expenses, and other charges related to the trust.  In this case, the trustee must make full disclosure of the financial affairs of the trust. 

- If the Trustee fails to abide by or disobeys trust provisions, then a Court can order the trustee to comply with and follow the terms of the trust. 

- In cases of gross dereliction of duties, fraud, conversion, and self-dealing, a Court can remove a trustee from his / her office; appoint a receiver, temporary trustee, trustee or co-trustee. 

These are merely some of the equitable remedies available to trust beneficiaries in the event that a trustee breaches a trust. If you have questions about these remedies, contact the Law Office of Stefan Cencarik, PLLC, trust litigation and estate litigation attorneys located in the Greater Boston area at 781-463-6063.