Friday, August 15, 2014

My Trusted Trustee Has Gone Bad!

In some unfortunate cases, a trustee of a trust may fail to follow the terms of the trust or may take actions inconsistent with their fiduciary duty as a trustee.  Fortunately, Nevada law provides several remedies when a trustee beaches his or her fiduciary duty to the beneficiaries:
 
NRS 163.115 allows a beneficiary or co-trustee to maintain a court proceeding if a trustee (1) commits or (2) threatens to commit a breach of trust.   The beneficiary or co-trustee can ask the court to apply the following remedies to correct or rectify any breach of trust:
·         To compel the trustee to perform his or her duties.

·         To enjoin the trustee from committing the breach of trust.

·         To compel the trustee to redress the breach of trust by payment of money or otherwise.

·         To appoint a receiver or temporary trustee to take possession of the trust property and administer the trust.

·         To remove the trustee.

·         To set aside acts of the trustee.

·         To reduce or deny compensation of the trustee.

·         To impose an equitable lien or a constructive trust on trust property.

·         To trace trust property that has been wrongfully disposed of and recover the property or its proceeds.
 
These tools allow beneficiaries and co-trustee to request the court’s help to remedy any bad actions taken by existing trustees.  The tools also provide peace-of-mind to clients who are creating new trusts or have existing trusts as the courts can take action against any future trustee who does not follow the terms of their trust.  These laws and many other laws in the state of Nevada help protect you if your trusted trustee has gone bad.

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