Disclaimer: This article provides general information about Maryland trust law. It does not constitute legal advice. Always consult a qualified attorney about your specific situation.
Detailed Answer
Under Maryland’s Uniform Trust Code (Md. Est. & Tr. §§ 14.5-101 et seq.), beneficiaries have multiple avenues to challenge a trustee who misuses trust funds.
1. Demand an Accounting
A beneficiary may ask the court to compel the trustee to deliver a full accounting of all trust activities. The court can order this under Md. Est. & Tr. § 14.5-507. You file a petition in the county where the trust is administered and request an order requiring the trustee to produce ledgers, bank statements, and receipts.
Link: Md. Est. & Tr. § 14.5-507
2. Petition to Remove the Trustee
If the trustee has breached their duty of loyalty, misapplied funds, or acted in bad faith, a beneficiary can petition for removal. Under Md. Est. & Tr. § 14.5-509, the court may replace the trustee if removal serves the trust’s best interests or protects beneficiaries.
Link: Md. Est. & Tr. § 14.5-509
3. Seek Monetary Relief (Surcharge)
A surcharge orders the trustee to repay misappropriated funds plus interest. The court can impose this civil sanction for breaches under Md. Est. & Tr. § 14.5-505. You must prove the amount of funds taken or misused.
Link: Md. Est. & Tr. § 14.5-505
4. Injunctive Relief
If the trustee’s misuse is ongoing, beneficiaries can ask for a temporary or permanent injunction to halt further misapplication of assets. The court weighs the risk of harm against the trustee’s duties.
5. Mediation or Settlement
Before or during litigation, parties may resolve disputes by mediation. This can be faster and less costly than a full court trial.
Helpful Hints
- Gather all trust documents and past accountings before filing any petition.
- Keep a detailed log of suspected misuses, including dates and amounts.
- Consult an attorney experienced in Maryland trust litigation as soon as you suspect wrongdoing.
- Be prepared to advance filing fees and court costs; you may recover them if you prevail.
- Consider alternative dispute resolution to preserve family relationships and reduce expenses.