View Full Version : Can an estate file bankruptcy if the trustee got a loan then defaulted on it?
gypc67
Jan 25, 2012, 01:52 AM
Grampa had an atty who drew up a living trust for him, which named same atty as trustee. Living trust was so that Grampa's sister (95) could stay in the house (owned free & clear) until she passes, then the house would pass to my brother & I. The atty spent all ($600,000) that was in the estate, then got a loan on the property & stopped paying on the loan, all without saying a word to any of the beneficiaries. The lender is now about to foreclose & evict the 95 year old Great Aunt Ann. Thought maybe if I foreclose, as a beneficiary of the estate we could stop the foreclosure & save my Great Aunt? HELP PLEASE?
ScottGem
Jan 25, 2012, 04:28 AM
You need to sue the trustee for malpractice and malfeasance as well as prosecute for embezzlement.
I would be consulting another lawyer today.
I don't think an estate can declare bankruptcy, but starting litigation against the trustee, might forestall foreclosure.
It is also possible the loan can be voided since it may have been illegally obtained.
gypc67
Jan 26, 2012, 12:02 PM
Thank you Scott. I'm now learning that people (lawyers) can be adjudicated by the state bar, while not being prosecuted by the federal or state courts. He has been reprimanded for the same thing several times before by the bar already! One(local)lawyer recently was charged (in court) with 11 felony embezzlement counts, only 1 stuck due to plea bargaining, and the lawyer who stole more than $100,000 from the victims never had to spend any time in jail at all. Meanwhile, the little guys, who stole all of my Dad's property from his house & got caught, got 365 days in jail for felony "receiving stolen property"! This makes no sense at all! A little consistency in the judicial system doesn't seem like a lot to ask for! Just saying... Thanks for your help. I appreciate it.
ScottGem
Jan 26, 2012, 01:55 PM
Yeah, lawyers don't like to come down hard on other lawyers. They don't seem to understand that if they don't clean out the bad apples, it reduces the trust people have for them.
Good luck and keep us posted.