Can You Sue a Trustee for Misusing Funds?

Trusts are powerful estate planning tools that allow individuals to protect and distribute assets according to their wishes. When properly managed, trusts provide peace of mind and financial security for beneficiaries.

But if a trustee, the person charged with managing the trust, misuses funds or fails to uphold their responsibilities, beneficiaries may suffer significant losses. The good news is that under Florida trust litigation laws, trustees can be held accountable, and a Pompano Beach estate litigation lawyer can help.

Fiduciary Duties and the Misuse of Funds

Under Florida law, trustees owe strict fiduciary duties to beneficiaries. These include duties of loyalty, prudence, impartiality, and transparency. Trustees must manage trust assets solely for the benefit of the beneficiaries, not for themselves. When trustees breach these duties, beneficiaries may bring a lawsuit in probate or circuit court to enforce compliance and recover losses.

Trustee misconduct can take many forms. Some common examples include:

• Self-dealing. Using trust funds to invest in personal businesses or to purchase personal property.
• Improper distributions. Favoring one beneficiary over others without justification.
• Misappropriation of assets. Taking cash or property from the trust for personal use.
• Failure to account. Refusing to provide accurate financial records, leaving beneficiaries in the dark.
• Negligent investments. Making reckless financial decisions that deplete trust assets.

For example, Florida courts have found trustees liable when they used trust funds to pay their personal debts or when they sold trust property at below-market value to friends or family members.

Remedies Available in Florida Estate Cases

When beneficiaries sue a trustee for misusing funds, the court may impose several remedies, such as surcharge actions, trustee removal, and injunctions. A surcharge action is when the trustee is ordered to repay the trust for financial losses caused by their misconduct and removal of the trustee is when a neutral or successor trustee is appointed to protect the trust. Should a plan be required to stop the further misuse of funds while litigation is ongoing, injunctions could be part of the process as well.

Trust litigation often involves detailed financial records, competing family interests, and strict deadlines under Florida law. Beneficiaries may hesitate to challenge a trustee out of fear of family conflict or uncertainty about their legal rights. Yet waiting too long can allow further misuse and shrink the trust’s value.

An experienced Pompano Beach estate litigation lawyer can evaluate the situation, gather evidence of misuse, file claims in the appropriate court, and fight for remedies such as repayment and trustee removal. Legal guidance is essential for trustees who want to defend themselves against unfounded allegations, too.

Trusts exist to safeguard assets and honor the intent of the person who created them. If a trustee misuses funds, Florida law provides clear avenues for holding them accountable.

Have you suspected a misuse of funds? With the help of the skilled estate attorneys at Mark R. Manceri, P.A., beneficiaries can protect their inheritance. Legal remedies are designed to ensure the trust is properly managed and that beneficiaries receive the inheritance they are entitled to. Schedule a confidential consultation today.