Q: Texas laws: Can A Guardian of an elderly mother, who is incapacitated, withdraw funds from her mother's living trust?
Mother & father are settlors, primary beneficiaries, & co-trustees. Mother has been incapacitated. Father has been grossly negligent in his fiduciary duties as co-trustee. He has withdrawn/spent large amounts from the trust for his own benefit & didn't use any of the withdrawals for mother. Father has been outrageous & wasteful in his spending. He has been a victim of scams & fraud. He has virtually no expenses since he lives in an assisted living facility paid by his LTC insurance. Children are trying to protect mother's assets including the trust she inherited from her parents. Children are contingent/secondary beneficiaries of trust. Can a Guardian and/or Durable Power of Attorney withdraw funds from incapacitated elderly mother's trust for her expenses since she is settlor, primary beneficiary & co-trustee? What are the mother's rights on her own living trust?
A: The rights of an incapacitated co-trustee of a revocable living trust depend on what the trust document says. Most revocable living trust documents state that the co-trustee, in this case the husband, shall make all decisions in that event. Similarly, most revocable living trust documents state that the trust may be exhausted by the initial beneficiaries without regard to the fact that there are remainder beneficiaries. However, if the co-trustee is violating his fiduciary duty by wasting assets and/or failing to provide for his fellow initial beneficiary in accordance with the terms of the document, her agent under a durable power of attorney or the guardian/conservator of her estate may sue him for breach of fiduciary duty -- and may want to start with an Application for a Temporary Restraining Order.
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A: As Ms. Garrett said - it depends on what the trust documents allow. If you believe that a person's estate is being squandered and the current trustee does not have the capacity to serve, you may want to seek guardianship of the estate and/or person.
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