Common warning signs that a trustee may be acting dishonestly

Signs of a Dishonest Trustee

A dishonest trustee can cause significant harm to beneficiaries and the trust itself. Here are common warning signs that a trustee may be acting dishonestly or in breach of their fiduciary duties:

🔍 Signs of a Dishonest Trustee

  1. Lack of Transparency

    • Refuses to share financial records or delays providing information.

    • Avoids giving clear updates on trust administration or asset status.

  2. Unexplained Financial Discrepancies

    • Trust assets seem to be missing or undervalued.

    • Final accounting doesn’t match prior statements or known asset values.

  3. Delayed Distributions

    • Keeps postponing distributions to beneficiaries without a valid reason.

    • Claims that administrative tasks are taking longer than usual without supporting evidence.

  4. Commingling of Funds

    • Trustee mixes personal funds with trust assets — a clear breach of fiduciary duty.

  5. Excessive Fees or Unusual Expenses

    • Charging the trust large amounts for unclear or questionable expenses.

    • Reimbursing themselves for vague “services” or “travel.”

  6. Asset Transfers to Themselves or Their Friends

    • Sells trust property at below-market value to themselves or acquaintances.

    • Makes decisions that appear self-serving rather than in the beneficiaries’ best interests.

  7. Unapproved Investments or Sales

    • Investing in high-risk ventures without beneficiary consent.

    • Selling trust property without transparency or justification.

  8. Aggressive or Defensive Behavior

    • Becomes hostile or evasive when questioned by beneficiaries.

    • Attempts to intimidate beneficiaries or threaten legal action to avoid scrutiny.

  9. Ignoring the Terms of the Trust

    • Makes distributions or decisions that go against the trust document.

    • Fails to follow clear instructions from the grantor.

  10. Refusal to Resign or Involve Professionals

    • Insists on keeping control even when beneficiaries express concerns.

    • Avoids hiring accountants, lawyers, or financial advisors to assist.

If you notice one or more of these red flags, it’s advisable to request a formal accounting or consult a trust and estate attorney. In serious cases, you may be able to petition the probate court to remove the trustee and recover misused assets.