Court-Appointed Receivers | Safeguarding Trust & Estate Assets
Your parents owned a business and real estate. They successfully managed the business for decades and built up family assets. They put these assets into a trust where they remained as trustees during their lifetime.
When they passed away, successor trustees took over. The successor trustees, through incompetence or even wrongdoing, are damaging your family’s economic heritage. They are failing to keep trust property separate and identified, they lack complete and accurate financial records, they are self-dealing, and they are failing to comply with California’s requirements for serving as trustees.
Your parents intended for you to benefit from their lifetime of work and planning. You can see that their efforts – their legacy – are not important at all to the successor trustees. It seems as if the successors are interlopers – fiduciaries whose actions are indifferent to family history, the trustors’ intent or the dignity and concerns of beneficiaries.
So, what do you do as an aggrieved heir or beneficiary? The law affords a wronged beneficiary more than one remedy for the injury suffered. These remedies are by necessity judicial remedies – or remedies requiring the intervention of a court. Court intervention means a regulated dispute process – a process not entirely predictable but in our civilized society the primary venue for the redress of wrongs.
California law allows for the appointment of a receiver to take possession of trust property if a trustee commits a breach of trust or threatens to commit a breach of trust. A receiver is the agent of the court and as such is “(1) Is neutral; (2) Acts for the benefit of all who may have an interest in the receivership property; and (3) Holds assets for the court and not for the plaintiff or the defendant.” The receiver may continue to administer assets of the trust under court supervision until the court determines that the receivership is no longer necessary.
A receiver need not take possession of all trust property. As an example, a receiver may be appointed to operate a decedent or trust’s business during estate or trust administration. A successor trustee may be in good faith but simply incapable of running a business. In a situation like this a receiver may be a practical remedy that would preserve trust assets.
The bottom line is that beneficiaries threatened with harms to their beneficial interests in trusts are not without available remedies. At Hackard Law we serve aggrieved beneficiaries in the major urban counties of California, including Los Angeles; Alameda; San Mateo; Sacramento; and Santa Clara.
If your beneficial interest in your family trust is in danger because successor trustees are incapable or unwilling to protect trust properties and you want to talk about it, call us at Hackard Law: (916) 313-3030. We want to hear your story.