Can a trustee go to jail for stealing from a trust?
Asked by: Mikel Maggio | Last update: June 7, 2025Score: 4.6/5 (37 votes)
A trustee can go to jail for stealing from a trust, although a misappropriation of trust funds by the trustee is rarely handled in such an extreme manner. There are numerous other penalties that will be imposed first.
What happens when a trustee violates the trust?
When a trust breach occurs, a probate court can impose serious consequences and penalties, including suspension or removal as trustee or being surcharged – probate for being ordered to pay money – for damages caused by the breach. In rare and extreme cases, trustees can even face criminal charges.
What happens if a beneficiary steals from a trust?
Penalties Associated With Will and Trust Beneficiary Fraud
Depending upon the unique circumstances of your case and the charges you're facing, you could be facing extensive fines and even jail time, if convicted.
Can a trustee take money from a trust?
The trustee generally has the authority to withdraw money from a trust to cover the cost of third-party professionals, as well as any other expenses arising as a result of administration.
Can a trustee of a trust be held personally liable?
Trustees found guilty of self-dealing or conflicts of interest can be held personally liable for resulting damages and may face removal from their position.
What To Do If a Trustee Is Stealing? | RMO Lawyers
Can a trustee be criminally charged?
Yes, a trustee can be jailed for theft if they are convicted of a criminal offense. Under California law, the embezzlement of trust funds or property valued at $950 or less is a misdemeanor offense, which is punishable by up to 6 months in county jail.
Who holds a trustee accountable?
Trustees must follow the terms of the trust and are accountable to the beneficiaries for their actions. They may be held personally liable if they: Are found to be self-dealing, or using trust assets for their own benefit.
What is an example of trustee misconduct?
Examples of executor misconduct and trustee misconduct include: Failing to provide accountings to beneficiaries. Favoring one beneficiary over another. Misappropriating or misusing estate or trust assets for personal gain.
What happens if a trustee spend the money?
Ultimately, trustees can only withdraw money from a trust account for specific expenses within certain limitations. Their duties require them to comply with the grantor's wishes. If they breach their fiduciary duties, they will be removed as the trustee and face a surcharge for compensatory damages.
Can a trustee remove beneficiaries from a trust?
Can a Trustee Change the Beneficiary? Trustees generally do not have the power to change the beneficiary of a trust. The right to add and remove beneficiaries is a power reserved for the settlor of the trust; when the grantor dies, their trust will usually become irrevocable.
What is it called when a trustee steals from a trust?
While trust accountings can be an everyday occurrence in estate law, trustee fraud and embezzlement are just some of the startling discoveries that can be made. Fraudulently appropriating property that belongs to someone else, also known as embezzlement, is a serious crime.
Can you go to jail for breach of trust?
Although some breaches of trust are criminal offenses, a trustee can only receive a jail sentence for a breach of trust if they are convicted of a crime in a criminal court. Under California law, embezzlement of trust property worth $950 or less is a misdemeanor with a maximum sentence of 6 months imprisonment.
Can you sue someone for stealing your inheritance?
The California Probate Code allows for victims of inheritance theft to pursue double damages, treble damages, punitive damages, disinheritance of the thief, attorney's fees, and costs in particularly egregious circumstances, so often a letter that explains the potential consequences will be sufficient to convince your ...
Is stealing from a trust a felony?
Per California law, embezzling trust funds or property valued at $950 or less is a misdemeanor offense and is punishable by up to 6 months in county jail. If a trustee embezzles more than $950 from the trust, they can be charged with felony embezzlement, which can result in a 3-year jail sentence.
Can beneficiaries sue a trustee?
Trust beneficiaries can bring a claim against the trustee, so long as they have a valid reason. Valid reasons for trust beneficiaries suing a trustee include: The trustee misused or misappropriated trust assets for personal gain (e.g., trustee sold trust property and kept the proceeds from the sale).
What a trustee can and Cannot do?
A trustee cannot act outside the authority granted to them by the trust. They must manage assets and investments according to its terms and not engage in activities not authorized by it.
What happens if a trustee refuses to give beneficiary money?
If a mandatory provision promises trust funds to a beneficiary then the trustee must comply. If they refuse to distribute the funds, the beneficiary has grounds to sue the trustee.
Can a trustee take your money?
But generally, the trustee is entitled to use trust funds to pay for things like: Funeral and burial expenses for yourself or a trust beneficiary. Expenses related to properties included in the trust, such as repairs or property insurance. Repaying any debts owed by your estate when you pass away.
Who has more power, a trustee or beneficiary?
A trustee typically has the most control in running their trust. They are granted authority by their grantor to oversee and distribute assets according to terms set out in their trust document, while beneficiaries merely reap its benefits without overseeing its operations themselves.
Can you sue a trustee for harassment?
Trustees are personally accountable for their actions in managing the trust. California Probate Code §15642 allows beneficiaries to petition the court to remove a trustee if they can demonstrate misconduct or incapacity.
How do you hold a trustee accountable?
In order for the beneficiary to hold the trustee accountable, the beneficiary must have information about what the trustee is required to do and what the trustee actually does. Thus, the trustee has a duty to account and to inform.
What makes a trustee unfit?
(1) Where the trustee has committed a breach of the trust. (2) Where the trustee is insolvent or otherwise unfit to administer the trust. (3) Where hostility or lack of cooperation among cotrustees impairs the administration of the trust. (4) Where the trustee fails or declines to act.
Can a trustee be prosecuted?
Yes, a trustee can go to jail for stealing from a trust, if they are convicted of a criminal offense. In California, embezzling trust assets worth $950 or less is a misdemeanor crime that can be punished with up to a 6-month sentence in county jail.
Who can override a trustee?
Removal by the trustor
A trust agreement should state the circumstances under which a trustee may be removed by the trustor. Trust agreements usually allow the trustor to remove a trustee, including a successor trustee. This may be done at any time, without the trustee giving reason for the removal.
When can a trustee be held personally liable?
Per California trust law, if a trustee has committed a breach of their fiduciary duty, the court can deem them personally liable for damages. The extent of liability, ultimately, depends on the severity of their offense and your situation.