Tag Archives: mismanagement

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How to Remove a Conservator

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How to Remove a ConservatorWhen someone is legally appointed to manage the finances of another person, that’s known as a “conservatorship.” This is a beneficial option for those who aren’t able to manage their own money due to health concerns, mental illness or old age. There are also conservatorships for children who receive money.

Unfortunately, some conservators mismanage funds (intentionally or unintentionally), compromising the financial wellbeing of people who aren’t able to tend to their own affairs. While it’s normal to become angry or frustrated in these situations, you should know that you have legal recourse to remove an ineffective conservator and seek a replacement.

A conservator has a legal duty to protect and conserve the protected person’s money and assets. If the conservator fails to fulfill these duties and responsibilities, he or she can be removed from the position.

The first step in the process is to gather evidence. You will need to prove that the conservator has failed to perform the required duties. Evidence might include bank statements or copies of checks that show the conservator has not been acting in the best interest of the protected person (known as a “ward”).

These statements can be compared against the annual accounting that the conservator is responsible for filing. If you need additional information in order to prove the conservator’s mismanagement of funds and assets, you can petition the court for a more detailed disclosure of financial dealings. Look for an experienced probate litigation attorney to assist you with this process.

Your attorney will help you file a notice of appearance and submit the documents that show the mismanagement of the protected person’s funds.

If you need to get documents from the conservator or another party (such as a bank or other involved person), your attorney can serve what is called a “subpoena duces tecum.” If you’re not able to get the necessary documents for evidence, you may need to work with the court to obtain them.

After you and your attorney have submitted the documentation, the court will rule on whether the conservator should be removed and, if so, will appoint a successor.

The courts, and the state and county governments, take very seriously the rights of vulnerable children and adults. The court accountant’s office closely monitors conservatorships. The court accountant, however, is merely reviewing annual accountings. If you or another family member discover before that review that money is being stolen or misused, you or the family member should take immediate action.

It’s important to act quickly in situations where money or assets are being stolen. Such quick action will increase the likelihood of recovering lost funds.

If you have questions about how to remove a conservator, please contact our office. We’d love to help.

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Petition for Removal of Personal Representative

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Hey, this is attorney Paul Deloughery. I’ve been practicing probate litigation since 2007. One of the things I often get asked to do is to remove a Personal Representative (also known as the Executor) who is not performing his or her duties. Read more here.

How do you remove a Personal Representative who has already been appointed by the court? You hire a good probate litigation attorney. And that attorney follows A.R.S. Section 14-3611 regarding the removal of a Personal Representative. The attorney will also look at all of the various duties of a Personal Representative and make a list of various ways in which the PR has failed to live up to the required standards.

Here is a list of common failings by a Personal Representatives that can support removal of that person:
1. Failing to provide the heirs with an Inventory and Appraisement within 90 days of being appointed.
2. Failing to sell the house.
3. Failing to fairly distribute the personal property.
4. Failing to file tax returns or pay the taxes.
5. Using the estate money for his or her own personal use. (also referred to as “stealing”)

The nerve-racking part to this is needing to wait. If you didn’t get the Inventory exactly 90 days after the PR was appointed, you can’t file a Petition for Removal of Personal Representative the next day. The courts are fairly forgiving at first. Being two months to provide the Inventory will warrant a status conference with the judge. It won’t be enough to remove the PR yet.

However, there is a tipping point. If the Inventory is late, AND there is evidence that the Personal Representative is not treating the heirs fairly (as required by the Will or statute), AND there is some evidence that the PR is using the estate money personally, then that is probably enough to justify having the court appoint a successor PR.

The best thing to do is to talk to a probate litigation attorney. If you have any questions, give us a call at 602-443-4888. We will listen to your specific situation and tell you your options.


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How to Remove a Trustee

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How to Remove a TrusteeNot everyone works out. And you have the right, as a beneficiary of a trust, to petition to remove the trustee of the estate if he or she proves to be incompetent, hostile, dishonest or otherwise unable to fulfill the responsibilities of administering the trust.

Here’s a quick definition of a trustee and a summary of the duties of the position.

A trustee can be a person (or a trust company) who has legal title to property, who holds that property for the benefit of another and who has assumed a legal duty (also called a fiduciary duty) to act in the best interests of the beneficiaries of the trust. As you can imagine, things can go awry.

Here’s an all too-frequent scenario from a recent case:

In a case involving a prominent Phoenix family that operated multiple businesses owned by their trust, the father had passed away a number of years earlier. The mother continued running the businesses, gradually turning over control to her adult children. One of the sons took control of the trust after the mother developed dementia.

The son used the money from the trust to enhance properties he would ultimately inherit. He also bought himself a new car and started taking lavish cruises and vacations.

My clients – the siblings of this trustee – turned to me for help. First they obtained evidence of wrongdoing. In this case, they were able to get copies of checks written from the trust directly to the trustee. This gave us enough to petition the court and get the son removed as trustee and replaced with a private fiduciary.

Trusts can be set up to allow for safeguards in case of wrongdoing. That is, they contain trigger points that can lead to the removal of a trustee.

For trusts that don’t specify a mechanism to remove a trustee, the court recognizes other reasons. Here are three:

  1. If the trustee has committed a breach of the fiduciary duties of care over the assets or loyalty to the beneficiaries. Examples include failing to pay taxes, stealing assets, and not following the specifications of the trust.
  2. If the trustee is unfit, unwilling or persistently fails to act in the best interest of the beneficiaries and the trust, the court can remove the trustee.
  3. In come cases, the circumstances surrounding the trust can change significantly or all qualified beneficiaries can request the removal of the trustee. The court can review the case and remove the trustee if it deems this for the best interest of the beneficiaries, as long as this isn’t inconsistent with the original specifications and intent of the trust.

If you are the beneficiary of a trust, it’s important to know what to do if the assets are being mismanaged. Trusts are normally very private affairs. In addition, trusts, being civil matters, are outside the jurisdiction of the police. There’s typically no court supervision and no government regulation to make sure that the trust is being run properly. It’s up to you and your attorney to pay attention to how a trust is being managed.

You need to take immediate action if you believe money is being misused. Proactive action increases your ability to protect your inheritance. Contact an experienced probate attorney at the first indication that a trustee is unethical or irresponsible with trust assets.

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Pitfalls of Estate Planning: When Assets Are Used for Personal Benefit

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When Assets Are Used for Personal BenefitA trustee must never use the assets of a trust for personal benefit (unless this is specifically permitted by the trust). There’s really no wiggle room here. Trustees are held to the highest legal standards.

If you’re serving as a trustee, conservator or guardian, it’s important to clearly understand the duties of your position to be certain that you are performing your duties correctly and to protect yourself and reduce your liability in case of error.

Most cases where assets are mismanaged involve trusts. This is because trusts are normally unsupervised. As a result, it’s not uncommon for a trustee to neglect providing beneficiaries with annual accountings or to keep detailed bookkeeping records. Laws vary by states, but in Arizona, current law requires that a trustee give annual accountings and provide beneficiaries sufficient information to protect their interests.

Some trustees, unfortunately, take the breach of duty further and use an estate’s funds for their personal use. Taking family vacations, buying cars or paying off a personal mortgage are all examples where a trustee has breached fiduciary duty by misusing trust assets.

Here are the three biggest mistakes trustees make when managing trust assets:

  1. Failing to keep records.
  2. Taking unauthorized personal “loans” from the trust.
  3. Using assets for personal use – and thinking they won’t get caught.

A trustee who mismanages trust assets—whether intentional or unintentional—can face severe legal consequences. But you should know that if you’re serving as a trustee and don’t understand your responsibilities and duties, you don’t have to do it alone. An attorney with experience in trust management can help you avoid making costly mistakes and ensure that you’re aware of your responsibilities.

From the other side, if you’re a beneficiary and you suspect the trustee is mismanaging assets, don’t wait to take action. Seek legal counsel from a skilled probate attorney.

Settling an estate is a complex process. Probate court offers resources and recourse for those who are working to settle a loved one’s estate. We’d love to help make this process easier for you and your family. Give us a call with any questions about how you can properly manage a trust, and what you can do when trust assets are being mismanaged.

In the next post, we’ll look at how to deal with estate conflict in probate disputes.

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