In 30 years, my trust account has not grown. Can I sue my bank trustee for poor performance? Michigan law regarding trusts is codified atMCL 700. 7101 to MCL 700.7511.
Answer: Yes, the trustee can be sued for breach of their duties. The bank, as trustee, has a duty of loyalty, obedience and reasonable care. The bank owes the duty to carry out their agency with reasonable care in light of local community standards and taking into account any special skills. You must be notified of all principal matters coming to the bank’s attention affecting the trust.
The fact that the account has not grown in 30 years calls into question the breach of these duties. There are a variety of remedies to call upon. A suit can be filed based upon breach of contract or under tort law for misuse of property, intentional or negligent misperformance, or failure to perform. Similarly, an action for secret profits or an accounting is an option.
MCL 700.7307(3) sets forth the items that must be contained in an accounting. The accounting should include current values at the beginning and end of the accounting period mean. Consider requesting those values in the aggregate or on an asset by asset basis. Also consider to request both beginning and ending market values on an asset by asset basis. The accounting must also provide gains and losses incurred during the accounting period separately in the same schedule. Consider requesting gains and losses reported in a list of transactions versus transactions grouped by category.
There is no case law yet interpreting these accounting provisions. Courts can look to National Fiduciary Accounting Standards and Model Account Formats (1988) by the Committee on National Fiduciary Accounting Standards. A copy of these standards and model account formats may be requested.