Legal Question in Wills and Trusts in New Jersey

Trustees fidicuary duty

My mother owned a business with her mother and they were told to have a trust setup. She also had a personal life insurance policy. Her children were benficiaries to both the trust and policy. When our mother died, her mother who is the executor and trustee used the proceeds from those policies to help pay for business debts with promissory notes written up. I've have repeatedly try to explain to her that those policies were set up to benefit us and have to be paid back. She refuses to repay any of those loans to date saying that she was suppossed to benefit from those policies. The lawyer who is handling the estate seems to be looking out for her interest instead of ours forcing us to hire our own attorney. So far we've tried having her removed as trustee and executor with no success. Can she get in to trouble if she refuses to repay any of the loans?


Asked on 2/19/08, 5:33 pm

2 Answers from Attorneys
Jonathan Chester The Law Office of Jonathan S. Chester, Esq., LLC

Re: Trustees fidicuary duty

I agree with Mr. LeVine. In addition, the attorney may also have a conflict of interest if he represents your grandmother or the business and is also representing her as trustee. You may want to seek his removal as well (I find that will often speed up a resolution of the matter).

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Answered on 2/20/08, 7:59 am
Walter LeVine Walter D. LeVine, Esq.

Re: Trustees fidicuary duty

Without seeing the actual trust document involved, it is hard to provide an actual answer on the facts you have presented. Presuming the trust was to benefit the grandchildren only, the use of trust proceeds by a trustee for personal gain is a major nono, and if funds were borrowed, even if permitted (which I doubt) they must be repaid. Again, if the facts are as you presented, it should be possible to have the trustee removed and replaced, and suit to force the repayment started.. This response presumes facts not presented, and it is not based upon reading all documents involved and necessary to provide a specific answer to the question presented.

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Answered on 2/19/08, 11:36 pm


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