Trustee won't distribute funds from the trust, won't even return calls.

October 18, 2013 12:07 PM

A relative of mine died a over two years ago, leaving a very small estate and a small trust. There were various delays, so the trust was in stasis for nearly a year. The delays have been resolved, but I cannot get the trustee to pay out the funds. What do I do?

The lawyer who was handling the estate is also the trustee. He switched firms about 8 months into the whole process without telling us, and I couldn't reach him for a month or two. I finally reached him, and he assured me he would distribute the trust soon, but now he just will not respond to emails or calls. I call his office and speak to his secretary, who assures me he will respond soon, but he never does.

The trust is small enough that it hardly seems worth the emotional effort and expense of trying to take legal action against him. However, I could use the money. This lawyer/trustee seems to believe he really has no obligation to distribute the trust or communicate in any way with the beneficiaries. At this point, after about 8 fruitless months of constant efforts to get him to respond, I think he has no intention of ever distributing the funds or responding to me. (I should add that the terms of the trust were that it was to be distributed in a lump sum as soon as possible to the beneficiaries. There's no debate about that; even the lawyer agreed, when we were on speaking terms. There is no legal reason to delay the distribution.)

I simply can't believe that a lawyer at a Park Avenue law firm would find it worth embezzling a trust so small, but… why else would he refuse to be contacted? He does get a trustee's fee of a few hundred dollars a year, but that's about an hour of billing for him.

I doubt his firm will care if I complain to the higher-ups, because this trust is not handled by their firm and besides, if they hired this guy, I assume they're a bunch of crooks too.

What is my remedy for this? How do I get him to respond, and to distribute the funds from the trust? Do I need to hire another lawyer to sort this out? I hope not, because I never want to see a lawyer again in my life.

posted by ROTFL to Law & Government (19 answers total)

tell your story in a letter to the bar association of his state, send a copy to him. that usually gets a lawyer's attention.
posted by bruce at 12:12 PM on October 18, 2013 [15 favorites]

Write a letter with two recipients on the top line, like this

Managing Partner:
Address

Lawyer
Address

Dear (Name of Lawyer)

I am writing regarding trust number X. No disbursements have been made from this trust. I have called multiple times and have received no return call. blah blah blah.

Signed

ROTFL

I am a lawyer I am not your lawyer, and this is not legal advice, just standard escalate to management advice.
posted by Ironmouth at 12:12 PM on October 18, 2013 [10 favorites]

A. The trust is small enough that it hardly seems worth the emotional effort and expense of trying to take legal action against him.

B. I simply can't believe that a lawyer at a Park Avenue law firm would find it worth embezzling a trust so small...

Statement A would seem to give you an answer to statement B.

You need to lawyer-up. Or contact whichever state agency oversees the management of trusts and the like.
posted by Thorzdad at 12:13 PM on October 18, 2013 [1 favorite]

Also, to be clear a copy goes to the managing partner. be sure to request an explanation for why the trust has not been disbursed.

I am a lawyer, I am not your lawyer and this is not legal advice, just advice on how to get a response from someone not responding to queries.
posted by Ironmouth at 12:15 PM on October 18, 2013

Response by poster: Ironmouth, thanks -- just to clarify, he became trustee when he was working at Firm X and left (apparently not on great terms) to go to Firm Y, where he is now. Does Firm Y give a damn about what happens with some trust he took on at Firm X? Not even under the auspices of Firm X, but just as an individual trustee?
posted by ROTFL at 12:17 PM on October 18, 2013

Firm Y does have an interest in not seeing one of their guys being disciplined by their state bar association, for any reason.
posted by fingersandtoes at 12:21 PM on October 18, 2013 [14 favorites]

Send a copy of Ironmouth's letter to the lawyer in question, the managing partner AND the state bar.
posted by Ruthless Bunny at 12:24 PM on October 18, 2013 [1 favorite]

Firm Y has a huge interest in the matter. I'd fax it, you'll get a call that day.

Write your own letter, thanks!
posted by Ironmouth at 12:25 PM on October 18, 2013 [7 favorites]

I'd advise against sending it to the bar yet. Just get the funds disbursed. The bar issue may delay that. You really want a written letter sent to him first. Seals the deal if there needs to be discipline later.
posted by Ironmouth at 12:30 PM on October 18, 2013 [4 favorites]

Agree with everyone else's assessment of the situation so far. Send a firm letter, I'd hold off on escalating to the bar for a bit if it were me. Are you in touch with the other beneficiaries? Can you present a united front? Do you have a copy of the trust paperwork? Is this lawyer the one who drew up the trust? Can you go to the office in person? Could someone else? Do you have documentation of the times you've attempted to contact this guy (even approximate, would be handy to put into a letter. "I've tried to contact you on A, B, C, D and E dates with no return call..."

I went through some similar issues with my father's estate and some trusts and we managed to get some movement by contacting the firm who drew up one of the trusts who (as a professional courtesy, we sent them a thank you gift later) asked the trustee politely to get a move on. There may be tax/money issues that this lawyer is incompetently dealing with and/or other issues relating to how this gets managed with his firm. He also may have fucked something up and is delaying telling you. I think it is very unlikely there is embezzlement going on, much more likely to be incompetence.
posted by jessamyn at 12:43 PM on October 18, 2013 [5 favorites]

Jessamyn's got some excellent points.
posted by Ironmouth at 12:47 PM on October 18, 2013

I wouldn't escalate to the Bar either, but I'd threaten to. If you involve the Bar now, you've played your hand and he has less reason to hurry. In the note to the MP I'd say "thank you for your prompt attention to avoid escalation of this matter to the appropriate disciplinary and legal channels" or something like that.
posted by fingersandtoes at 12:47 PM on October 18, 2013 [1 favorite]

Response by poster: To answer some of the questions:

Yes, the trustee is in fact the lawyer who drew up the trust. I am in touch with other beneficiaries, some of whom have as little as a couple hundred dollars coming to them -- they want their money as well, but I think they are prepared to write it off because it's not worth the hours of work and aggravation they would need to invest. I suppose they would likely cosign a letter if I wrote it, though.

Firm X, his original firm, appears to hate him and have been exceedingly chilly when I contacted them. Doubt we'll see much help from them.

He definitely fucked at least one thing up -- didn't pay a major bill that was supposed to be paid from the trust. He had assured me 2 years ago that he was on it and would deal with it as the trustee. I got a certified letter early this year from the person who was owed the money, threatening to sue the lawyer and me (because I was the executor of the estate, which the lawyer also handled). The person had no grounds to actually sue me (no estate to pay anything with), but I was cc'ed, I suspect, because they, like me, probably had trouble reaching this lawyer. Eventually we found out what the person was owed (I was also cc'ed on this, that's how I know), but I can't find out whether they were paid.
posted by ROTFL at 12:58 PM on October 18, 2013

If it comes time to get a bigger stick, would going to the state attorney general (because possible fraud) be better than going to the bar?
posted by rmd1023 at 1:00 PM on October 18, 2013

This is not legal advice.
Generally, trustees have a fiduciary duty to properly administer the trust. The state bar association might be one avenue, but it also might be beneficial to talk with another lawyer.

Keep track of your communications with the trustee and make sure you have a paper trail of the times you have tried communicating with him.
posted by helloimjohnnycash at 1:48 PM on October 18, 2013 [1 favorite]

I bet you'll find he is a principal, or the principal of firm Y, and left firm X because of conduct similar to what he's done to you (which I think will turn out to be embezzlement) but on a much larger scale.

Firm X, his original firm, appears to hate him and have been exceedingly chilly when I contacted them. Doubt we'll see much help from them.

His malpractice insurance will probably turn out to be through them, if he had any-- and if he didn't they could be liable for failing to make sure he did-- and they hope to discourage you from going after them or their insurance, but don't be deterred by that kind of tactic; the fact that they're so chilly is in itself a strong indicator that they think they are liable.

If you have to sue him or them, scout around for other smaller victims with whom you can share legal expenses.
posted by jamjam at 1:59 PM on October 18, 2013 [1 favorite]

He may be refusing to be contacted because you're not really a valuable client anymore (I'm assuming he gets paid from the trust as a trustee but it's a minor admin amount) and he really just doesn't care. Trusts are actually a pain to administer and he may have already messed up the accounting and is avoiding it. He may also realize that he's made a mistake that will attract disciplinary attention and does not want to deal with it, it probably isn't his only mistake. He may also have been fired from his last job and is scrambling to prove his worth at the new one by making money so you're not a priority.

I would possibly send a letter to an identifiable person in charge of him, but also just look at making a complaint. The facts are: he got paid or is getting paid to do what he does, you have emailed him and have proof of this, he has not responded.

Start with the professional complaints body in his region. New York would be this resource, it appears. It depends on jurisdiction but they may do most of the investigative work for you to figure out what has gone on. HOWEVER, they can't order him to pay the money out - they can only professionally sanction him if he doesn't try to make it right quickly. Messing around with trust funds is a good way to get in trouble and is pretty serious. It's professional complaint territory. The above website, if it applies, has materials setting out how things work. If the above does not apply, Google: lawyer discipline 'your region'. Getting a tap from the above investigators is likely to get his attention, and he'll probably get off easier with them if he fixes things up with you quickly (i.e. a letter of warning instead of a full hearing). Also, the investigation they conduct may provide you with (free) valuable evidence about what has gone on to pressure a resolution.

You may want to hustle this along in case there are limitation periods that apply and there has to be an application to court to remove him as the trustee/recover the funds.
posted by skermunkil at 2:03 PM on October 18, 2013 [1 favorite]

IAAL in New York. Here's what I learned to do about an incompetent or crooked contractor:

1. Write the following letter, with your address, phone number and email address at the top, followed by the date: Dear Mr. ___: The trust for ______ was settled on _____, but you have not paid out the assets to me. Please do so immediately. If you do not, I will make a complaint to the the Senior Partner of your firm and also to the Bar Association's Character Committee. Very truly yours, _________

2. Make two originals and sign them both. Make several copies and put them in a manila envelope.

3. Make two envelopes with your return address, one marked FIRST CLASS MAIL and the other marked CERTIFIED MAIL, RETURN RECEIPT REQUESTED. Put an original in each envelope and seal it.

4. Bring the letters to the Post Office. For the Certified one, fill out the green Certified Mail form and the green Certified Mail Return Receipt card. For the First Class one, fill out the white Certificate of Mailing form. Bring everything to the clerk.

5. The clerk will apply the Certified Mail form and the Return Receipt and give you the tear-off part. Then the clerk will stamp the Proof of Mailing form and give it to you. Keep both of these in the manila envelope along with several copies.

If the attorney is crooked, he will know that he can't be forced to go to the post office to pick up a certified letter. If he doesn't go, you will get the envelope back in about a month with stamps on it detailing at least three attempts to deliver it.

He will also deny that he received the first class letter. However, he is sunk by the Certificate of Mailing, which creates a legal presumption that the letter was delivered in due course, which he can't rebut merely by denying that he received it.

If you still don't hear from him, send a copy of the two letters and the receipts to the senior partner of his firm. Look the firm up on Martindale.

If that doesn't work, send copes to the local bar association with a request to open a complaint.

If the amount is relatively small, investigate bringing an action in your local Small Claims Court. Again, come in prepared to hand the judge or referee copies of your letters and receipts. Appearing in Small Claims Court will cost him time and money. If that doesn't shake loose the trust assets, nothing will. In that case, you will get a judgment, which you can have the sheriff execute by going to his office and starting to cart the computers and furniture away.

Good luck.
posted by KRS at 2:54 PM on October 18, 2013 [23 favorites]

You know, it would probably be really effective if you had another lawyer write the suggested letter. At the bottom, go ahead an cc. it to the disciplinary division of your state's bar association and include a copy of your formal complaint.

There may also be a miscommunication behind the scenes of where responsibility for the trust went. Sometimes, cases and clients stay with the firm; sometimes they follow the lawyer. In my state, as far as I know, it's the client's decision after being informed their attorney is moving. Since that didn't happen here, something may also be up at the old firm.

IAALBIANYLATINLA, etc.
posted by mibo at 11:05 PM on October 18, 2013