Intention of trustee to secure a “housing benefit”

Client is a 70-year-old woman with significant mental disabilities. Client and her two sisters (one of whom was also disabled) were beneficiaries of a trust established by their father, of which the “non-disabled” sister was the trustee. The trust said that it was not a requirement but the father’s “intention” that the trustee secure a “housing benefit” for the disabled children. The trustee decided to sell the house and initiated an eviction proceeding against the client. Discovery in the case revealed that the trustee did nothing to assist the client in finding a place to live (the client ended up initially in a motel, and then in public housing). Further discovery revealed that the trustee used funds from the trust to pay for certain personal expenses, such as a new car.

Result: Trust severed by the court, with 40 percent going to a new trust for the benefit of the client, and with that trust managed by a professional money manager. Trustee agreed to personally pay $20,000 directly to the new trust.

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