Criminal Charges for Embezzling From a Trust

January 12, 2011 by Scott C. Soady

Being a trustee of a trust is an important job and requires a high degree of honesty, trustworthiness, and ethics. Trustees are fiduciaries and have a number of duties under the California Probate Code. Trustees have the duty of loyalty (Probate Code 16002), the duty to deal impartially with the beneficiaries (Probate Code 16003), and the duty to avoid conflict of interest and not self deal (Probate Code 16004). Any breach of these duties is a breach of a trustee’s fiduciary duties. There are remedies in the Probate Court when there has been a wrongdoing by the trustee and there can also be criminal charges filed against a trustee who does not properly do his job.

For example, a man in northern California who embezzled more than $100,000 from his grandmother’s trust was recently charged withe first degree embezzlement. After becoming the trustee of his grandmother’s trust, he started taking cash from her CD’s and depositing the money in two of his business accounts. Between 2003 and 2006, he allegedly withdraw $108,000, leaving his grandmother with only $6,000 forcing her to move from her home because her grandson had not paid the mortgage. The grandson claimed that he had to withdraw the money to support his wife and 6 kids.

The choice of a trustee is so important. This individual may be handling your trust when you are still alive if you become incapacitated or decide you just want assistance at some point. When you consult with Scott C. Soady, A Professional Corporation about a trust, we can assist you in narrowing the choices for a successor trustee and put safeguards in your trust to reduce the risk of trustees helping themselves to the trust assets. We also handle trust litigation and elder abuse cases where a trustee has taken money from a trust and therefore needs to be removed from the position and compelled to repay the money to the trust. We are happy to help with any of these “trustee” issues.