In a recent case in Dallas County, F+B represented beneficiaries of a Trust who successfully removed the trustee of the trust for having stolen assets from the Trust. At issue, the beneficiaries’ grandmother had created a trust for her daughter and grandchildren. She named her adult grandson as the trustee of the trust to take over management of the trust upon her death. The trust owned a series of rental properties that generated significant income to the Trust each year, and the properties held by the Trust had a combined value of approximately $2 million.
After demanding an accounting from the Trustee, F+B determined that the trustee had paid himself significant “fees” from the trust for various fabricated charges. The payment of these fees resulted in the trust being completed depleted of any income each year so that none of the other beneficiaries of the trust actually received any distributions from the trusts. This course of conduct went on for approximately 3 years before the beneficiaries filed suit to remove the trustee.
As soon as the suit was filed and it became evident that the trustee’s conduct was going to be addressed through the Courts, the trustee fled to live in a central American country where he believed he could escape any sort of consequence from his actions. He failed, however, to account for the fact that the Court had served him with the lawsuit prior to leaving the country. As a result, when he failed to appear in Court, the Court was able to enter a judgment against him, which resulted in his removal as trustee and also his forfeiture of any further interest in the trust. Ultimately, the other beneficiaries of the Trust ended up with all of the assets in the trust as compensation for the theft that had occurred.
Trust litigation often involves fiduciary litigation where parties seek to hold a fiduciary accountable for their actions. This case is a perfect example of the trustee fiduciary being sued for actions he wrongfully took as trustee. F+B represents clients regularly in fiduciary litigation cases.