Why Narcissists Drain Estates (And How to Stop Them)

Key Takeaways

• Narcissists have a tendency to seek control and power, which is dangerous in the case of estates where they are appointed as trustees with access to funds. 
• Narcissistic trustees often use tactics like avoidance or gray area spending to exert control over trust finances and hope to have mismanagement slip under the radar.
• Interested parties in trusts and estates controlled by narcissists can stop them from draining funds by taking steps like demanding estate accountings or, in severe cases, filing a breach of fiduciary duty claim.
• Consulting an attorney is the best course of action for determining next steps if you believe that a trustee is a narcissist.

Introduction

Narcissists thrive off of manipulation and control, often seeking power for themselves, which can create a terrible formula when you introduce finances into this picture. This tendency is especially dangerous when they hold a position of power and influence. When appointed as trustees or executors in charge of a trust or estate, narcissists are at their most dangerous, as they have access to important funds.

A narcissist is a person who meets the criteria to be diagnosed with narcissistic personality disorder. This condition leads people to seek power, influence, and control over others for their own personal gain. Not only is dealing with a narcissist particularly draining and difficult, but narcissistic trustees can pose a critical threat to a family’s estate or trust, as they have the tools to exert power and control by taking advantage of an entire family’s established right to an inheritance.

Fortunately, interested parties in an estate have avenues available to them to seek restitution for the wrongdoing of narcissistic trustees. It’s important to understand what tactics are necessary to get a narcissist to comply, given their personality type that rarely responds to consequences that most individuals would accept; often, strict legal action and enforcement of one’s fiduciary duty is necessary for protecting the estate.

The Psychology of the “Narcissistic Drain”

It’s important to understand the true psychological motivations behind cases of narcissistic drain, and for them, these motivations are typically more about control than money. The money itself is just an explicit avenue to exert control, and stealing or withholding assets allows the narcissist to maintain leverage over siblings or other beneficiaries while also satisfying their feeling of entitlement to these funds.

In extreme cases, the psychology of a narcissist can result in a “scorched earth” mindset. The narcissist may even allow the estate account to hit zero before being willing to tolerate the idea of “losing” to other beneficiaries by allowing them to get their rightful inheritance. Narcissists crave attention and drama, so prolonging the legal process and causing problems provides them with the satisfaction of having the attention on them.

Narcissists often lack empathy, so they will have little concern for the idea that they are causing financial damage to other beneficiaries. This factor means that quick and strategic action is necessary to get them to stop before they drain the entire estate. 

How Narcissists Bleed Estates Dry: Common Tactics

Unfortunately, we’ve seen a few common themes in how narcissists behave in trustee or estate executor roles. Being able to spot these tactics allows you to protect your family’s estate. The most common tactics include the following.

Frivolous and “Gray Area” Spending 

This tactic often involves commingling personal funds with estate funds to make accounting difficult and make theft difficult to identify. Trustees may even go as far as vaguely describing transactions as “administrative fees” to get away with charging the estate for their own personal expenses, like exorbitant travel or personal vehicles. In some cases, narcissistic trustees take advantage of trust funds to support an exorbitant lifestyle, such as living in a trust property before distribution by charging the estate for fees like utilities, property taxes, or renovations. 

Weaponized Delay and Obstruction 

Narcissistic trustees may use time to their advantage, taking excessive time to respond to requests for accounting information to shield themselves from being criticized for wrongdoing. They may even obstruct further by releasing accounting information that is difficult to understand or incomplete. This may make it look like they are complying, but, in actuality, it kicks the can down the road to make it difficult to criticize their work up to this point.

Red Flags That Your Trustee is a Narcissist

Being able to identify that an executor or trustee is a narcissist early is important for early identification of concerns that an estate or trust is being mismanaged. Interested parties in a trust or estate should be able to recognize these signs so they can be vigilant against mismanagement.

Red flags to keep an eye out for include:

• Unhealthy Communication Patterns – Volatile communication habits like promising distribution soon followed by negative behavior like ghosting or aggressive outbursts when asked for updates are often signs of manipulative behavior.
• Victim Narrative – A narcissist often paints themselves as the victim in a situation, and in a trustee role, they may likely position themselves as the martyr who is working really hard to satisfy beneficiaries who are “greedy” or “ungrateful”.
• Secrecy – Secretive or suspicious behavior, like refusing to share bank statements, tax returns, or estate accountings, is often one of the clearest signs of estate mismanagement.

While a trustee being a narcissist is not a legal reason to have them removed from their position, recognizing the signs of narcissism can put you in the best possible position to protect your family’s inheritance.

Legal Strategies to Stop the Bleeding

There are many legal avenues available to address irresponsible and gross mismanagement of an estate. Interested parties in a trust or estate should take the following steps.

Demanding an Accounting

According to both California and Texas state law, along with many other states, beneficiaries have a right to receive an accounting of all transactions. In California, the accounting should be provided at least once a year and within 60 days upon reasonable request. As interested parties in a trust, beneficiaries have a right to know exactly what assets are in the trust and how money is being spent.

These accountings should include: 

• An inventory of outstanding assets
• A summary of income and expenses
• Summaries of investment gains and losses
• Any distributions to beneficiaries

In other words, a trust accounting will provide a detailed summary of trust transactions to make it easy to identify if fraud has taken place, providing evidence for removal. At the same time, failing to provide an estate accounting is a breach of fiduciary duty, which could lead to more extensive legal action and removal. 

Beneficiaries should keep detailed communication records showing when they requested this accounting to provide to the court in case they fail to comply. The support of forensic accountants may also be beneficial in cases where personal and professional funds have been commingled in order to identify tangible misconduct.

Petition for Suspension and Removal

Beneficiaries have the right to petition to suspend or remove a trustee if they can demonstrate that they are consistently failing to uphold their fiduciary duty. If beneficiaries or other interested parties have sufficient grounds to suspect mismanagement or misconduct by a trustee, they can petition the court to conduct a breach of fiduciary duty case. They will need to gather sufficient evidence to present to the court to show that a trustee is acting irresponsibly in their role.

Surcharge and Recovery

A surcharge is a court-ordered penalty where the courts order trustees or executors to pay to provide restitution for any losses caused by mismanagement, negligence or breach of fiduciary duty. The trustee will be required to pay out of their own pocket or their share of the trust inheritance to refund the trust for any losses or recover a stolen inheritance.

For example, if a trustee spends $3,000 of trust funds for their own personal travel, and the court rules in favor of the beneficiaries, the trustee will be ordered to refund $3,000 to the trust. In many cases, if evidence supports that the trustee acted in bad faith, courts may also order the irresponsible trustee to pay back any legal fees paid by the beneficiaries in the case. In California, depending on the actions of the Trustee, recovery may include additional damages. You should seek advice from a Trust Litigation Attorney to determine whether such damages apply to your case.

This strategy also requires acting quickly, as it is crucial that parties take legal action before the narcissistic trustee spends all the money and has no personal assets left to seize.

Why Traditional Mediation Often Fails

While traditional mediation is often the preferred method for addressing most estate disputes, it often fails in cases of narcissistic trustees, due to the common narcissist mindset that compromise is a loss. Narcissists may either be unwilling to negotiate and assert that they have done nothing wrong, or they may agree to terms in mediation and immediately break them. 

Often, court orders with defined consequences are the only factor a narcissist will respect. It can be difficult to grapple with the need for pursuing litigation and the associated costs, but in some cases, it may be the best option to prevent a narcissist from draining estate or trust funds entirely.

Especially for parties interested in avoiding conflict, it can be easy to hope for the trustee to come to their senses and realize that they are causing trouble for the rest of the involved parties. Unfortunately, however, for people who lack empathy, this is unlikely, and will only lead to potentially hundreds of thousands of dollars lost and valuable time lost to stop it.

Consulting with an attorney is the most important first step. An experienced trust litigation attorney will help you understand your legal options to determine the best path forward for protecting your and your family’s inheritances.

Navigate Dealing with a Narcissistic Trustee With the Help of RMO

Narcissistic trustees are in a dangerous position, with the control and access to drain entire estates. Fortunately, interested parties in these estates have legal avenues at their disposal to stop them, but it’s crucial to act quickly to preserve the value of the estate. The longer you wait, the more potential funds that can be lost.

For support in navigating cases involving narcissistic trustees, turn to the trust litigation attorneys at RMO Lawyers. We protect people like you every day. With decades of experience in helping families navigate conflicts ranging from inheritance disputes to breach of fiduciary duty claims, we’ll work to develop a robust legal strategy that protects your family’s trust or estate and secures your rightful access to an inheritance.

Schedule a consultation with the trust litigation team at RMO to protect your estate.

Frequently Asked Questions