What Is an Action to Return Assets?

Executive summary

• An action to recover stolen estate property is a legal avenue that involves petitioning the court for a court order to return property stolen from a trust or estate.
• This action may be necessary when an individual steals assets from an estate or individual through fraud, undue influence, or coercion and negotiations will not work.
• The process for filing this action includes filing a petition with the court and presenting evidence of the act of estate property theft. 
• The support of a trust or probate litigation attorney can help you navigate the legal process and utilize your rights to recover your rightful inheritance.

Introduction

An action to recover stolen estate property assets is a legal process that can be used to obtain a court order to return money or property that was wrongfully taken from a trust, also called estate theft. Estate theft occurs when an individual improperly takes or redirects assets from a decedent’s estate or trust. This can manifest in various ways, from outright theft of physical items to the redirection of assets for personal gain. Estate theft often takes place when someone violates the clear gifting terms outlined in a will or trust document.

In cases of theft or other situations where trust property is inappropriately obtained by the trustee or another individual, an action to return assets empowers you to get the misappropriated assets back.

If you have experienced a misappropriation of trust or estate property, then it’s important you understand your legal options and act quickly. An action to recover stolen estate property can be a valuable legal option for obtaining assets that were wrongfully taken. Understanding how to file actions to recover property for an estate will increase your chances of recovering your rightful inheritance.

What is an action to return assets wrongfully obtained from a trust?

An action to return assets wrongfully obtained from a trust or estate is a legal process allowed by California Probate Code 850 to recover assets that were improperly taken from a trust. Under this code, you can file a petition requesting the court to order the wrongfully taken property to be returned to the trust. The California Probate Code does provide statutory bases for pursuing double damages, treble damages, punitive damages, disinheritance of the abuser, attorney’s fees and/or costs in egregious cases.

An action to recover stolen estate property may be necessary in the following scenarios: 

• A trustee has committed theft of estate assets
• Assets were obtained by an individual through undue influence
• Assets were misappropriated through fraudulent means
• A relative or caretaker has stolen trust or estate assets

An action to recover stolen assets can be relevant to a wide variety of California probate matters, including trust administration, probate administration, and conservatorships or guardianships alike. 

This part of the California Probate Code may also be used to compel the transfer of certain assets held by an administrator or trustee to their rightful recipients. California Probate Code 856 states that, if the court believes that the property should be transferred, it can issue an order authorizing and directing the trustee or the person having title to or possession of the property to transfer it to the trust or directly to its beneficiaries. The court may also use its discretion to grant “other appropriate relief.”

In addition to an order to return the property, California Probate Code 859 requires the person who took the property to pay twice the value of the property recovered and reasonable attorneys’ fees if the court finds that they wrongfully took, concealed, or disposed of property belonging to a trust in bad faith, acquired the property by the use of undue influence in bad faith or acquired the property through the commission of financial elder or dependent adult abuse. 

What is a misappropriation of trust or estate property?

Misappropriation of trust or estate property occurs when an individual manages or takes assets in contradiction with the wishes of the head of an estate. The fate of trust or estate assets should be addressed according to the terms outlined in the trust instrument, will, or other estate planning documents. Ultimately, misappropriation occurs when someone handles these assets in a way that violates the estate’s intentions, usually involving means such as theft, fraud, or undue influence. 

Examples of misappropriation of trust or estate property include: 

• Forging estate planning documents to direct estate property for personal benefit
• Influencing an individual for personal gain of estate assets
• Concealing assets left behind by a decedent
• Stealing material belongings that are property of an estate 

Stealing estate property is normally handled as a civil matter, and not a criminal matter, which means that you must seek a resolution through the court system rather than law enforcement. However, if one believes the theft rises to the level of financial elder abuse, it may also be investigated by law enforcement.

Misappropriation or theft of estate assets can take place at the hands of a family member, trustee, estate executor, or another person close to a decedent. Protecting estate assets is typically the responsibility of the trustee or the estate executor. However, they are also in a position where they are more likely to be able to access and mismanage assets, which is why it’s crucial for all parties to maintain transparency surrounding estate transactions and accountings.

How to recover stolen estate property

If you are an interested party in an estate where assets have been misappropriated it is important to follow a careful process to maximize the chances of recovering the property.

Recovering estate property includes the following steps:

• Consult a trust or probate litigation attorney to discuss your concerns
• Gather and document any potential evidence of misappropriation of assets or theft
• Filing an action to recover stolen assets with the court 
• Attending a probate court hearing to present your case and provide evidence

Upon realizing that estate assets have been stolen, many people consider consulting law enforcement. However, the police will rarely take steps to handle cases of theft, and instead, they will usually redirect you to the probate court. 

There is a statute of limitations on recovering stolen estate property, so it’s important to act quickly so that you can increase your chances of receiving your rightful inheritance. Your legal options can also become more limited for other reasons as time goes on, like if all of the stolen assets have been sold or spent, preventing you from receiving the assets that are rightfully yours.

If you suspect theft of estate assets, you should consult a skilled trust or probate litigation attorney as soon as possible. An attorney will discuss the best legal path for recovering your stolen inheritance and increase your chances of recovering your stolen assets. There are time limits to when a case can be brought, and, if you delay, you may lose your right to pursue your claims. A trust litigation attorney can help you understand your rights and ensure you file your claims on time so they aren’t forfeited.

How do I file an action to recover stolen assets?

To file an action to return assets wrongfully obtained from a trust, you will need to submit a petition to the court. Filing an action with the necessary petition includes the following steps.

1. Submit a petition to the court

When you submit your petition to the court, you should ensure that the petition states what you believe happened and requests that the court order the property be returned. The petition must include the necessary facts to support your request. A trust litigation attorney will help you in seeking relevant evidence of the theft and including all necessary information in the petition to highlight the suspected misappropriation of assets and the damages you’re seeking. 

1. Notify all interested parties of the action 

Under California Probate Code 851, you must provide formal notice of the hearing and a copy of the petition to the trustee, all beneficiaries, and each person claiming an interest in, or having title to or possession of, the property.

The notice of hearing must contain the following information:

• A description of the property that is sufficient to provide adequate notice to any party who might have an interest in the property
• For real property, the street address or, if none, a description of the property’s location and assessor’s parcel number
• If the petition seeks double damages under California Probate Code 859, a description of the relief sought sufficient to provide adequate notice to the party against whom that relief is requested
• A statement advising any person interested in the property that they can file a response to the petition
  

1. Attend a court hearing

After notifying all interested parties, a court hearing is necessary to present your evidence of the misappropriation of assets and seek a recovery of the assets. During this hearing, you will be able to present evidence of the suspected wrongdoing, discuss the damages you are seeking, and explain why they are necessary.

The accused party will also have an opportunity to defend themselves and their actions. For example, an executor may be accused of misappropriating assets while

They can argue that this management was necessary for upholding the interests of the estate before the court and present evidence in order to protect their role, their professional legitimacy, and the interests of the estate. 

A probate litigation attorney can represent you in a court hearing and help you present evidence to increase your chances of a favorable outcome. Because attorneys often have extensive experience in courtroom litigation, their support can be valuable in taking the burden and stress off of you in proving your case.

What is the double damages provision?

Double damages are twice the amount of damages that a plaintiff would normally receive for the wrongdoing committed by a defendant. According to California Probate Code 859, the double damages provision specifies that a person is liable for double damages if they have wrongfully taken or misappropriated property from an estate.

For example, if an executor steals property from an estate and this is proven in court, they will not only be liable for paying back the assets they stole from the estate but also twice these amounts as damages. In other words, if a party steals $3,000 worth of assets from an estate, they will be responsible for paying back $6,000 in damages. 

However, it’s important to note that if double damages are awarded, this only occurs after the individual has been proven responsible by the court and that the court has found additional aggravating circumstances giving rise to the increased penalties. Therefore, if you initiate legal action against a beneficiary or trustee, then you will be responsible for paying things such as your legal fees and filing fees upfront, even if you may have the chance of recovering them by proving your case and proving the need for these heightened damages to the court.

Alternatives to legal action 

Filing an action to return assets and navigating the court system is not the only way to recover estate assets. If you have experienced a misappropriation of estate assets, you can pursue mediation or negotiations as alternative options to litigation, which can save time, money, and stress associated with navigating the court process.

• Mediation and negotiation are cooperative methods of alternative dispute resolution that take place outside the courtroom and involve discussions between beneficiaries and the person responsible for misappropriating estate assets. This option can allow you to negotiate the individual returning stolen assets in exchange for keeping some or another incentive. This process often involves the support of an experienced attorney or retired judge who can act as a neutral third-party to help both sides reach an agreement. 
• Arbitration is also an option. Arbitration can involve presenting both sides to a judge who decides who should receive the assets and how much. In this process, the judge may allow an individual to retain some assets, while requiring them to return other assets to the estate. Unlike mediations, which will typically only be binding if the parties voluntarily reach a settlement, a judge’s decision at arbitration will usually bind the parties, just like a court’s decision after a trial.

Mediation or arbitration may be preferable routes if the person responsible for misappropriating estate assets believes they are entitled to a portion of the estate and you believe you can reason with them for a solution that benefits both sides. The sessions are conducted by a trained mediator (most often a retired probate judge) who helps the parties reach a mutually acceptable agreement. The mediator does not have any authority to make decisions, but serves as a facilitator between the parties to help them analyze the situation, discuss relevant information, and explore possible solutions. These routes are also preferable if you are concerned about paying extensive legal fees or want to preserve family dynamics. They are cheaper and less time-consuming than going through the court. 

Consulting an attorney can provide you with support and legal guidance to help you determine the best legal path for you and which may bring the best possible outcome given the circumstances. 

Common challenges and pitfalls

Cases of stolen estate property are difficult to navigate, as they are both stressful and often emotionally challenging, involving feelings of frustration and betrayal. Understanding the common challenges can help you prepare for navigating the process and equip you to recover your rightful inheritance.

Common challenges involved in asset recovery include: 

• Navigating family dynamics – Family dynamics can complicate the evidence-gathering process and make it difficult to pursue legal consequences against a family member. It takes a sensitive approach to recover stolen estate property while preserving family relationships.
• Gathering evidence – Gathering the right evidence can be challenging depending on the case, especially if an individual is sneaky about their theft of assets, and involves analyzing the estate inventory, requesting an estate accounting, and combing through estate transactions.
• Not seeking support – Proving your case on your own can be challenging and prevent you from achieving the best possible outcome, so it’s a good idea to consult an attorney in the process. 

With the support of a trust or probate litigation attorney, you can navigate these challenges easier with a helping hand to guide you through your legal options. A lawyer can support you in either mediation or litigation to increase your chances of recovering stolen assets with as little family interference as possible. 

How to prevent the theft of estate assets

Despite the complications and challenges involved in cases of theft of estate assets, there are safeguards you can put into place that can minimize the risk of theft or misappropriation. 

To prevent the theft of estate assets, you should consider the following steps:

• Choose a reliable trustee or executor to manage the estate
• Obtain and closely review an inventory of estate assets
• Hold trustees and executors accountable by requesting frequent communication and periodic accounting of estate assets
• Pursue trustee or executor removal if they demonstrate a threat to the trust or estate assets
• Maintain strong communication between other beneficiaries
• Be aware of signs of theft, such as secrecy, withholding estate information, or unaccounted-for assets

Although any interested party can play a part in preventing a misappropriation of estate property, the executor is in a crucial position to hold and protect estate assets and prevent theft. The executor or trustee can file court petitions to freeze estate accounts and assets to minimize damage, pursue civil litigation against potential wrongdoers, and, if necessary, hire accountants or advisors to keep a rigid eye on estate inventory and related transactions.

Do I need a probate lawyer to file an action?

While California law does not require you to have a probate lawyer to file an action, it is difficult to succeed in any legal action on your own. An experienced probate litigation attorney knows the detailed and nuanced requirements of the law, and having professional representation will significantly increase the chance of the trust assets being recovered. 

If assets have been wrongfully obtained from a trust, you should contact a probate lawyer immediately. The longer you wait, the less likely it is that the assets will be recovered. A skilled probate attorney can provide legal advice on the best course of action to protect your interests.

Turn to RMO LLP for support in recovering your assets

An action to recover estate property is a valuable legal avenue for recovering stolen estate property. If you have experienced a misappropriation of trust or estate property, it’s important to turn to a skilled and experienced attorney for support, as they can guide you in understanding your legal options for recourse and helping you navigate the legal system. 

At RMO, our trust litigation attorneys are well-versed in issues surrounding inheritance theft. With decades of experience in helping trust and estate beneficiaries secure access to their rightful inheritance, our attorneys will support you in recovering your stolen inheritance and devise a strategy to secure the best possible outcome.

Schedule a consultation with our team today to learn more about your legal options and how we can support.