Trustees hold significant legal power over assets that belong to others. When they misuse that power, Rhode Island law gives beneficiaries real tools to respond.
What a fiduciary duty means for trustees
A trustee owes beneficiaries a duty of loyalty, care and impartiality. These obligations require the trustee to act in the best interest of the trust at all times. R.I. Gen. Laws § 18-2-1 gives the Superior Court authority to appoint or remove a trustee who refuses to act or fails to perform their duties. The law treats this responsibility as a legal obligation, not a discretionary role.
Common ways a trustee may breach their duty
A breach can take many forms, and not all of them are obvious. Beneficiaries should watch for these warning signs:
- Self-dealing: The trustee uses trust assets for personal benefit or sells trust property to themselves at below-market value
- Mismanagement: The trustee fails to invest prudently or ignores claims that could benefit the trust
- Failure to follow trust terms: The trustee withholds required distributions or ignores the grantor’s instructions
- Secrecy: The trustee does not provide accountings, transaction records or an asset inventory to beneficiaries
Any of these actions could expose the trustee to personal liability for losses the trust suffered.
Consequences a breaching trustee may face
Rhode Island courts can impose serious consequences on a trustee who violates their duty. The court may order the trustee to repay financial losses from their own assets. It can also reverse unauthorized decisions and compel the trustee to restore any profit they gained through misconduct. In cases of bad faith, the court may require the trustee to pay the beneficiary’s legal costs. Removal from the role is also a possible outcome under state law.
Understanding your options as a beneficiary
Trust disputes in Rhode Island can be complex. An attorney can help you understand your options and determine whether a breach has occurred.
