Trustees and executors of estates have a great deal of control and power over the assets for which they are responsible. In a small number of situations an executor of an estate, or trustee, may have acted without integrity and may have used the trust or estate assets for their own benefit. The rogue trustee or executor may not have declared all of the assets and/or claimed them for themselves. They may have transferred assets to themselves such as property or money from a bank account and refuse to hand it over to a rightful beneficiary. They may not have declared all of the assets and claimed them for themselves. This is formally known as misappropriation of estate/trust property.

Do you have concerns that an executor or trustee may have wrongly taken estate or trust funds, or is refusing to tell you anything about your inheritance?

Or if you are an executor or trustee, has a disgruntled beneficiary made allegations against you personally and you are worried about your position?

If so, we may be able to help. Call us now on 0808 164 0808 or request a call back , and one of our team will call you.

Table of Contents:

How common is a claim that someone has taken estate assets?

Such claims tend to be most in situations where there is only one executor or trustee and they are dealing with the assets without any assistance from a professional e.g. a solicitor. There is no one to oversee their actions and prevent any fraudulent behaviour. Beneficiaries of an estate or trust may never discover what has happened or if they do it can be a long time after the event so cannot hold them to account.

Can other people be guilty of misappropriation?

Other people, such as other family members (whether a beneficiary of the estate or not), are often guilty of misappropriation of estate property. This tends to occur when one family member has keys to the deceased’s property and they have removed items of jewellery, cash or other valuable possessions before they have formally been accounted for and safeguarded. It will be difficult to prove that someone has taken those items if there is no record of them. Another common scenario is someone making withdraws from the bank account after the person’s death. That person may have been helping the deceased with their finances during their lifetime and still has the bank card and pin number or access to online banking.

Can someone misappropriate assets unintentionally?

This often occurs when the person who has taken assets does so on the mistaken belief that they were promised them by the deceased before their death. Or on the basis that it has been agreed with other family members previously that they should have that particular item even if it was left to someone else in the will. Alternatively, a person may feel that they deserve those assets for the help and assistance that they gave during the deceased’s lifetime. Some people can take assets on the assumption that it’s simply classed as an “advance” of what they are due to receive from the estate. However, all these assets have to be accounted for and should have been administered properly. The executor(s) of the estate should investigate such claims and ensure that all assets are returned to them. Though again it can be difficult to prove what was supposed to be in the estate in the first place.

What can be done if someone has taken estate or trust assets?

Anyone who has misappropriated assets would be personally liable to pay them back or the equivalent value. If they are a beneficiary under the estate/trust then their share can be reduced to take into account the value of the assets that they have already had. If their share is not large enough to cover these losses in full, or they are not entitled to anything from the trust, then they would be ordered to pay back the monies from their personal assets such as savings accounts or property.

Assets such as property or valuable unique items (such as paintings) may have to be traced if they have found their way into a third party’s hands.

If an executor or trustee takes assets, then in addition to paying it back, it would amount to a breach of trust and they would almost certainly be removed from their role. They would not be considered suitable to continue to act. If the assets were not declared in any tax returns and the right amount of tax paid on it then HMRC are also likely to be interested in their actions! They will be personally pay the tax that is due.

Misappropriation of estate or trust property may also have criminal consequences and in certain circumstances could be classed as theft.

How we can help

We can help you take all the steps mentioned above, so that as a beneficiary you do not lose out.

It is important that anyone who has concerns about possible misappropriation of trust or estate assets acts promptly. Steps should be taken to safeguard assets to prevent further losses to the estate and to improve the likelihood of any assets being recovered. Prevention is better than cure!

Given the serious nature of the allegations, anyone facing such claims from disappointed beneficiaries should take specialist legal advice to protect their position as soon as they become aware of them.

If you have any concerns that an executor or trustee may have wrongly taken estate or trust funds, or if you are an executor/trustee and such allegations are being made against you, call us now on 0808 164 0808 or request a call back.

Misappropriation of assets scenarios

Allegations from a sibling

Mrs C is appointed as the sole executor of her mother’s estate under her Will. Mrs C has one sister, Mrs D.

The Will says that the estate is to be split equally between Mrs C and Mrs D. However, the sisters do not get on. Mrs D is upset that she was not named as an executor in the Will along with Mrs C. Mrs C begins the estate administration but straight away, Mrs D starts making complaints about the way in which the estate is being dealt with, accusing Mrs C of the following:

  • Not declaring all the cash present in their mother’s house
  • Stealing said cash
  • Stealing their mother’s diamond necklace
  • Not selling their mother’s property for enough money.

Mrs D is demanding that Mrs C steps down as an executor and lets her take over the estate administration. She is also threatening to report the matter to the police.

We can assist Mrs C to defend these allegations against her and resist any claim for her removal as an executor. We can also deal with any queries from the police.

Assets stolen by sole executor

Mr A is the residuary beneficiary of his late father’s estate which is being administered by his father’s friend, Mrs Z, who is appointed as the sole executor.

Under the Will, Mrs Z receives a small legacy of £500 and the rest of the estate is left to Mr A. The estate consists of a property worth about £250,000 and some jewellery including a signet ring worth £10,000. The signet ring is very important to Mr A and has a great deal of sentimental value.

Mrs Z decides she doesn’t want to instruct solicitors to deal with the estate administration and wishes to do it herself to save money. Mrs Z contacts Mr A and lets him know that she is sorting out the estate. She said that she has arranged to clear out the property but that there was no signet ring in the house, so his father must have sold or given it away before he died. After 12 months, Mr A hasn’t heard anything further from Mrs Z and is becoming concerned. He is aware that Mrs Z has got the grant of probate but when he asks her about the estate she keeps fobbing him off saying that the property is proving difficult to sell.

Mr A then discovers that the property has been sold some months earlier when he sees it on Rightmove. He was then told by Mrs Z’s son that Mrs Z has recently come into money and has bought herself a new car, and been on a number of expensive holidays. Mrs Z’s son also said he had been given an expensive signet ring from his mother as a Christmas present. Mr A asks Mrs Z to set out what exactly what is happening with the estate and Mrs Z admits that there is £70,000 missing from the estate but refuses to explain what happened to it.

We can help Mr A to bring a claim against Mrs Z to recover the monies that were wrongly taken. Mrs Z would be personally liable to pay back all the money due under the estate. Mr A would also be able to trace the signet ring to Mrs Z’s son and to recover that from him. We would also discuss with Mr A about whether or not he wishes to involve the police.

Breach of trust by family member

Miss B receives a gift of £50,000 under her grandmother’s Will which she is entitled to when she reaches the age of 21. Miss B is only 11 years old when her grandmother dies and so her share of the estate is put into trust for her until she reaches 21.

Miss B’s uncle is named as the trustee under the Will and so he is responsible for looking after the £50,000 and investing it on behalf of Miss B. When Miss B turns 21, she contacts her uncle to ask for her share of the estate. However, her uncle ignores her calls and emails for some time and when he finally responds he is vague about what has happened to her share of the estate. He finally admits that he spent the £50,000 on a property many years ago, which is in his sole name. He rents out that property and it is now worth £100,000.

We can assist Miss B with a claim against her uncle to get the money – he wrongly spent her money and so her uncle is obliged to repay it to her. Also, we can advise Miss B about bringing a claim for breach of trust against her uncle. As he was acting as a trustee, he is not allowed to profit from his position as trustee. Miss B will have a claim against the property that her uncle bought using her trust money, and even though the property is in her uncle’s sole name, we can help Miss B get a declaration from the court that her uncle is holding the property on trust for her.

Therefore, Miss B is not only entitled to all the rents from the property since it was bought (which her uncle will have to account for and repay to her), but she is also entitled to all the equity in the property – the full £100,000.

Talk to our inheritance dispute experts

If you have any concerns that an executor or trustee may have wrongly taken estate or trust funds, or if you are an executor/trustee and such allegations are being made against you, call us now on 0808 164 0808 or request a call back.