Can one co-trustee of a trust sue someone for embezzling w/out consent from the main trustee and the other co-trustees? Posted on February 02, 2011

My grandma has a trust with her 3 children as co-trustees. She, my mom, and I manage the real estate within the trust. While the 2 other trustees have been inactive in managing the day-to-day operations of the real estate business for the last 13 years, my grandmother expressed that she wanted to recruit help from one of my cousins in order and include the rest of the family in the business in hopes of passing it on to the next generation.

Recently we had a couple of family business meetings to discuss how to restructure and streamline the business. My aunt, one of the trustees, took it upon herself to audit the books before starting this process. She found personal charges on the credit card used for business expenses. My husband and I charged our personal expenses on the card. Most of them were double charges through paypal for purchases on Ebay and Amazon, which we already disputed with those companies. Others were personal vacation expenses. These were authorized by my grandma because she wanted to rack up rewards points anyway and we had full intention of paying her back. However, instead of writing her a check to reimburse her, we gave her cash because she preferred to be paid in cash. Therefore, the payment didnt get traced on paper and that money never made it back into the business account, choking the cash flow of the business.

When I was asked about these charges, I explained this and when my grandma was asked if she authorized it, she denied it because either she didn't understand what was going on, or she didnt want any of the other grandkids to feel bad that she gave me permission to use her credit card for my personal stuff.

Since she denied it no one believes me or my husband. My aunt accused us of embezzling. She went to the assistant to the DA to inquire about a lawsuit against us, but luckily has not opened a case. Is she allowed to sue us for embezzling or is my grandma the only one who is in the position to do so?

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