Cleveland, Ohio, estate planning law firm, Baron Law LLC, Cleveland, Ohio, offers information for you to reflect upon while you are setting out looking for an estate planning attorney to help protect as much of your assets as you can. For more comprehensive information contact Baron Law Cleveland to draft your comprehensive estate plan to endeavor to keep more of your assets for your heirs and not hand them over to the government by way of taxes.
Trust settlors put a lot of faith and trust in their fiduciaries, that’s the whole point of having them. Trustees are responsible for carrying out the settlor’s purpose and trust instruction. They are often the sole representative of the trust long after the settlor passes and are the only point of contact for trust beneficiaries and other interested parties. Practically speaking, whether a trustee is doing a good job or bad job managing a trust and its assets is often indistinguishable for those not in the know. Only when things hit the fan, i.e. a trust inexplicably runs out of money or a trustee goes dark, do people start to legitimately question what a trustee is doing. So if you have an inkling that something is very wrong with a trust or with what a trustee is doing, what recourse do you have. As always, when it comes to trust management and potential trust litigation, consult an experienced Cleveland estate planning attorney. Litigation is the nuclear option so be sure you’re sure before it is used.
Complaint for Recovery of Assets
So, you’ve got a strong suspicion of trustee foul play, how do you get tangible evidence of trustee wrongdoing? Therein lies the rub. Since trustees often manage trust assets with little or no oversight and the control the flow of information, without court intervention it is hard to find out exactly what is going on with a trust. That is why Ohio trust law allows a compliant to be made by either a person interested in a trust estate, a creditor of such a person, or on a probate court’s own motion against any person suspected of having concealed, embezzled, conveyed away, or having possession or having been in possession of any monies, chattels, or chose in action of such estate. O.R.C. § 2109.50. This complaint asks the court to issue a citation to compel the trustee to appear for a hearing to testify what is going on with a trust. O.R.C. § 2109.50 also confers jurisdiction on a probate court to conduct summary proceedings to discover and retrieve specific property that belongs to the trust estate. Any relief that ultimately results from this proceeding, however, is restrained to only property of a trust estate.
A common issue brought by estate planning clients regards the recovery of funds withdrawn from a joint and survivor bank account that are alleged to have been for “convenience only.” Action to recover these funds and establish the true nature of such an account will lie under the same law as above. An experience Ohio estate planning attorney can assist if this situation applies to you.
Burden of proof
The hearing is dual purpose, it is an opportunity to get concrete answers about the what is going on with a trust but also to discover if a trustee engaged in criminal conduct. Per O.R.C. § 2109.52:
When passing on a complaint made under section 2109.50, the probate court shall determine, by the verdict of a jury if either party requires it or without if not required, whether the person accused is guilty of having concealed, embezzled, conveyed away, or been in the possession of moneys, personal property, or choses in action of the estate, testamentary trust, or guardianship.
The burden of proof is upon the complainant by a preponderance of the evidence to prove that the trustee/fiduciary has concealed, embezzled, conveyed away, or is in possession of money and/or property of the trust estate. The burden is on complainant to trace the money/assets back to the trust estate. Similarly, if the trustee/fiduciary in this proceeding admits to the withdrawal and retention of money, he thereby admits conveying such assets away and does the complainant’s job for him.
Possible Defenses
Just like any other cause of action, there are defenses that a trustee/fiduciary can utilize to protect themselves. For instance, proof that the transfer from decedent to the trustee was a gift or that title to the property had been transferred by a ward pursuant to a valid agreement made prior to the guardianship, constitutes a good defense, i.e. the defense of legitimate ownership/title.
In order to establish the defense of gift under O.R.C. § 2109.50, the elements of a gift must be shown by clear and convincing evidence. There are generally four elements to prove a gift: 1) capacity of a donor to make a gift, 2) intent of donor to make a gift, 3) delivery of gift to a donee, here the fiduciary, and 4) acceptance by the donee.
Concealment, embezzlement, and other similar causes against trustees, however, are not strict liability. Mistakes are made and a mistakes, without more, are generally not actionable. Ohio law generally holds that when a trustee has withheld assets of the decedent’s estate under the mistaken but good faith belief that the decedent had legally given such assets and it is found by a finder of fact that title to the assets lies with the trust estate, the trustee is not guilty of concealing estate assets without a showing of more than mere possession.
Evidence
In this proceeding, it is a probate court which cites the person suspected of having concealed or embezzled assets to appear before it to be examined on oath touching the subject matter of the complaint, and the court is in control of the examination, notwithstanding that such examination is delegated to and conducted by the attorneys. Further, it should be noted since this action is inquisitorial in nature and the witnesses called are those of the court, they are subject to cross examination, and the parties to the action are not bound by the testimony of such witnesses.
Further, the testimony of the witnesses shall be reduced to writing, signed by the witness and filed in the court per O.R.C. § 2109.50. This, however, is not mandatory, meaning it will only occur if either side requests it.
It’s never a fun thing to think that someone you had faith in betrayed your trust. Trusts fundamentally are nothing more than legal agreement in which you place responsibility in another to keep to terms of such an agreement. Sometimes you must resort to the courts to find out what is going on with a trust, or, in a worst-case scenario, forcibly take back trust property and money. An experienced Ohio estate planning attorney is in the best position to advise you on what to do if you are ever facing trustee misconduct.
About the author: Mike E. Benjamin, Esq.
Mike is a contracted attorney at Baron Law LLC who specializes in civil litigation, estate planning, and probate law. He is a member of the Westshore Bar Association, the Ohio State Bar Association, the Cleveland Metropolitan Bar Association, and the Federal Bar Association for the Northern District of Ohio. He can be reached at mike@baronlawcleveland.com.
Disclaimer:
The information contained herein is general in nature, is provided for informational and educational purposes only, and should not be construed as legal or tax advice. The author nor Baron Law LLC cannot and does not guarantee that such information is accurate, complete, or timely. Laws of a particular state or laws that may be applicable in a given situation may impact the applicability, accuracy, or completeness of the preceding information. Further, federal and state laws and regulations are complex and subject to change. Changes in such laws often have material impact on estate planning and tax forecasts. As such, the author and Baron Law LLC make no warranties regarding the herein information or any results arising from its use. Furthermore, the author and Baron Law LLC disclaim any liability arising out of your use of, or any financial position taken in reliance on, such information. As always consult an attorney regarding your specific legal or tax situation.
