Is Your Trustee Self-Dealing? What Remedy Do You Have In West Palm Beach Probate Court?

Is your West Palm Beach trustee investing your trust funds into companies   that he or she owns? Are you worried about other self-dealing? Has your trustee been loaning himself money from the trust? You may want to learn about constructive trusts and your remedies under the law for self-dealing.

Self Dealing

• A trustee owes you, the beneficiary, a duty of loyalty, which includes not self-dealing.
• This includes any type of self-benefit afforded the trustee besides reasonable compensation for their time and efforts.
• You can (as beneficiary) waive your duty of loyalty to a certain extent, including with regard to self-dealing.
• Is your trustee benefitting from his appointment in other ways that may be improper?
• What happens to the benefit that the trustee collected?
• Have you ever heard of constructive trust?

 Constructive Trust

• There is an old joke that whenever you see the word “constructive” around a word in law, it just means its not that thing. The joke goes a professor asks his students “what is a constructive cat? ” To which the student answers, “Whatever it is, it’s not a cat.”
• A constructive trust is not a trust.
• A court can rule after a trustee engages in self-dealing that a trustee is holding the benefit in constructive trust for the beneficiary (plaintiff).
• The trustee then pays all that benefit directly to the plaintiff, not into the trust.

Fabbio v. Narghizian

• In the March 26, 2015 case of Fabbio v. Narghizian the Second District Court of Appeal in California dealt with a joint venture gone wrong. The parties had similar duties of loyalty to one another that a trustee owes to a beneficiary.
• One partner began taking opportunities that the business was entitled to, and did not share those profits with the other partners.
• The court found that the self-dealing of one party was not permitted.
• The court ordered that all benefit derived from the self-dealing was held inconstructive trust and ordered it paid directly to the company.

Do you suspect your West Palm Beach trustee of self-dealing?

Want to learn more? Check out the entire case by clicking here.