It seemed ideal for family gatherings: a log-cabin near Yosemite. Richard Harley, in his role as trustee, bought it with funds from his parents’ family trust and put it in a separate trust—apparently without informing all of his siblings.

He died in 2014, and his sister Robin soon learned of the illicit transfer, which involved more than $775,000. She succeeded him more than a year later as the trustee and confronted Richard’s widow, who promised those assets would be returned to the trust by February 2017. When they weren’t, Robin filed suit against her sister-in-law and the trust.

Yet Robin lost in a federal district court based not on who did what, but when: A judge found that the statute of limitations provided that a lawsuit to enforce a claim against Richard needed to be filed within one year of his death. Because her specific claim for the return of the property was the same claim that she would have filed against her brother, Robin even lost her “broken promise” case against Richard’s widow—because of her bad timing. See CCP Sec. 366.2.

Don’t let hesitation ruin your legal standing. Promptly consult an experienced estate lawyer at the first sign of a defalcating trustee to protect yourself and your loved ones.  Rumbaugh v. Harley, No.2:17-CV-0197, 2018 Lexis 143033. (ED Ca. Aug. 22, 2018)

About the author:

John O’Grady leads a full-service estate and trust law firm in San Francisco. His practice includes Estate Planning & Administration, Probate and Trust Litigation.