A bank established in Missouri has the authority to serve as a trustee to an estate and carry out the grantor’s instructions for managing the assets held in its trust. When heirs allege that a trustee breached a duty of care by mismanaging assets, however, they may file a lawsuit to remove the trustee.
Trust creation occurs during the estate planning process and includes naming a trustee to oversee the contents. Cash, property and financial instruments left to a trust legally belong to its beneficiaries, and a trustee oversees the trust’s activities.
The general duties of a trustee include safeguarding or managing the assets. This includes investing its cash, renting property and generating income for the trust’s beneficiaries.
Heirs sue trustee alleging lost artwork
Several heirs of a deceased painter’s trust filed a legal action against the trustee bank accusing it of losing more than 100 pieces of his expensive artwork. As reported by KCTV 5 News, heirs allege the bank breached its duty of care by losing irreplaceable artwork entrusted to it by the late painter’s estate. The trustee bank purportedly placed several pieces of artwork on display in museums throughout the country but failed to effectively track and monitor their whereabouts.
The heirs also allege the bank sold artwork for less than fair market value and used the art as advertising. Estate law considers a transaction involving the estate’s assets as a breach in fiduciary duty if the trustee gains a self-serving benefit from it. Also known as self-dealing, estate law generally prohibits such transactions.
A legal action may provide a remedy
When a trustee engages in self-dealing, heirs may file a legal action to remove the trustee. The income obtained when a trustee sells an estate’s assets belongs to the trust and its beneficiaries.
If income generated by a trust fails to go to the proper parties, then a lawsuit may also include a request for damages to reclaim the missing funds. If the original testator did not name a successor for the trustee, the beneficiaries or the court may name a new one to serve as a more trustworthy replacement.