My sister and I are co-trustees of a trust my mother set up for my disabled brother. She has a history of financial issues and now has a debit card and checkbook for the trust account, allowing her to spend without my approval. I want to prepare for potential misuse without causing conflict. Here are my questions:
If she spends improperly, is it a criminal offense or civil?
How can I balance my brother’s needs and my relationship with her?
If she spends improperly while residing in another state, which laws apply?
Is there a specific threshold that determines the seriousness of the offense?
Improper spending from a trust can lead to civil liability, potentially requiring repayment of misused funds. If the misuse is severe, it could also attract criminal charges like fraud.
It’s crucial to document any improper spending. Open communication with your sister about money management might help preserve your relationship while protecting your brother’s interests.
If she spends improperly in another state, Texas law generally still applies to the trust, but consult a lawyer familiar with both states’ laws for specifics.
There may not be a specific monetary threshold, but significant or repeated misuse could escalate the situation. It’s best to consult an attorney for guidance.