Disclaimer
This article is for informational purposes only and does not constitute legal advice. Always consult a qualified attorney for advice tailored to your situation.
Detailed Answer
Under Rhode Island’s Uniform Trust Code (RUTC), a trustee must administer a trust in good faith and in accordance with its terms. Misusing trust funds—such as diverting assets for personal use or failing to keep clear records—breaches fiduciary duties and gives beneficiaries the right to challenge the trustee in court.
1. Identify the Breach
A breach occurs when a trustee violates duties under RUTC §18-15-15, including the duty to act loyally, keep beneficiaries reasonably informed, and account for trust property. See R.I. Gen. Laws §18-15-15: webserver.rilegislature.gov/Statutes/18-15-15.
2. Demand an Accounting
Rhode Island law allows beneficiaries to request a formal accounting. Send a written demand to the trustee outlining your concerns and requesting records of receipts, disbursements, and investments. If the trustee refuses or provides incomplete information, you can petition the court for an order compelling an accounting.
3. Petition the Court for Relief
If informal efforts fail, file a petition in the appropriate Rhode Island court (often the Probate Court or Rhode Island Superior Court) under RUTC §18-15-17. This statute authorizes the court to:
- Compel the trustee to perform duties.
- Order a trustee to provide a complete accounting.
- Surcharge the trustee for losses caused by breach.
- Remove or replace the trustee for cause.
- Enjoin continuing breaches.
See R.I. Gen. Laws §18-15-17 for a full list of remedies: webserver.rilegislature.gov/Statutes/18-15-17.
4. Prepare Your Evidence
Gather the trust document, bank statements, correspondence, and any other records showing misappropriation. Detailed documentation strengthens your petition and supports requests for damages or trustee removal.
5. Mind the Deadline
Rhode Island imposes a six-year statute of limitations for trust breach claims, measured from when you discover or should have discovered the breach. See R.I. Gen. Laws §18-15-1002: webserver.rilegislature.gov/Statutes/18-15-1002. Filing late can bar your claim.
Helpful Hints
- Review the trust instrument and any amendments carefully.
- Send a written request for an accounting and keep copies of your correspondence.
- Track all communications with the trustee, including emails and phone calls.
- Consider mediation or settlement conferences to resolve issues without full litigation.
- Consult an attorney experienced in Rhode Island trust law early to protect your rights.
- File your petition before the six-year statute of limitations expires.