Trustee Personally Liable for Rent-Free Occupancy and Trust-Funded Renovations

A recent decision from the New Hampshire Supreme Court delivers a clear and costly reminder to trustees: living rent-free in trust-owned property and using trust funds for personal renovations constitutes a breach of fiduciary duty, and the trustee can be charged personally for both the improvements and the fair rental value.

The Facts

After their mother died, three siblings, Nathaniel Moffat, Sarah Srebro, and Matthew Moffat, became equal beneficiaries of the Pamela Dawson Moffat Revocable Trust. The Trust was the residuary beneficiary of their mother’s Maryland-probated estate and required equal distribution among the three children.  The Trust was apprently not funded with either of the properties, thereby necessitating probate.  The trust held two neighboring properties in Hancock, New Hampshire; the first being a longtime family summer home, and the second being a nearby house purchased in 2020 with the mother’s funds.

Nathaniel served as trustee. He moved into the nearby house, paid for substantial renovations with trust assets, and occupied the home rent-free for an extended period. When the siblings could not agree on how to divide the real estate, Nathaniel petitioned the probate court for partition. Sarah responded with counterclaims alleging multiple breaches of fiduciary duty.

The Probate Court conducted a four-day trial, the probate court exercised its equitable partition powers to award the summer home to , award the nearby house to Nathaniel, but charged Nathaniel with the value of the trust-funded renovations and the fair rental value of his rent-free occupancy, finding that he had breached his fiduciary duties by prioritizing his personal interests over those of the other beneficiaries, and further, ordered him to reimburse the trust for the attorney’s fees and costs incurred in the litigation.  The case was appealed. 

On July 7, 2026, the New Hampshire Supreme Court affirmed the probate court's ruling in full. The Court held that, the probate court acted within its broad equitable discretion in partitioning the properties, the court's findings of breach of fiduciary duty were supported by the record, specifically, the trustee’s decision to occupy trust property rent-free and to use trust funds for renovations that primarily benefited him, and that the probate court had proper subject-matter jurisdiction over the fiduciary-duty counterclaims, even though the trust contained a District of Columbia choice-of-law clause.  On a procedural basis, the Supreme Court found that certain challenges to the remedy (including fee awards) had been waived or not properly preserved for appeal.Why This Matters for Families and Trustees

Trustees often believe that because they are also beneficiaries, they can treat trust real estate more casually, especially a family home. This case firmly rejects that notion. A trustee who occupies trust property without paying rent or who spends trust money on improvements that primarily benefit himself can be surcharged for both the rental value and the cost of the renovations. The decision reinforces several core principles of trust administration that are especially relevant in aging-in-place and family-wealth planning:

• A trustee must act solely in the best interests of all beneficiaries.
• Self-dealing with trust real estate (even when the trustee is also a beneficiary) requires careful documentation, consent, or court approval.
• Probate courts have wide equitable authority to fashion practical remedies when siblings cannot agree on the division of trust property.
• Personal use of trust assets without proper accounting creates lasting financial and family consequences.

Conclusion

Parents who place a family home or vacation property into a revocable trust (or who fund a trust that later purchases real estate) should consider clear instructions about occupancy, rent, and improvements. Beneficiaries who serve as trustees must understand that the role carries strict fiduciary obligations, even toward siblings.  When family real estate is involved, proactive planning and transparent communication remain far less expensive than years of litigation and personal liability.

If you are serving as trustee of a trust that owns real property, or if your family is struggling with the division of trust-owned homes, consult experienced counsel before decisions about occupancy or renovations are made. As this case demonstrates, the cost of getting it wrong can be substantial.

Case: Moffat v. Srebro, 2026 N.H. 25 (July 7, 2026)

Unauthorized Practice of Law: How Trustees Can Accidentally Cross the Line — and the Serious Consequences That Follow

In our previous article we examined a Texas Court of Appeals decision that dismissed a trust’s appeal because its non-lawyer trustee tried to represent the trust pro se. That case is only one illustration of a much broader and often misunderstood legal concept: the unauthorized practice of law (UPL).Trustees, executors, administrators, personal representatives, and family members who step into fiduciary roles frequently stumble into UPL without realizing it. Understanding the boundaries, and the risks, is essential for anyone managing a revocable living trust, especially when the trust owns real estate or other assets that may require court action.

What Is the Unauthorized Practice of Law?

The unauthorized practice of law occurs when a person who is not licensed to practice law in a given jurisdiction performs acts that constitute the practice of law. While the precise definition varies slightly by state, the core idea is consistent: only licensed attorneys may represent the legal rights of another person or entity. An individual may appear pro se (for himself or herself), but may not appear on behalf of anyone else, including a trust, an estate, a limited liability company, or another individual.  Typical acts that courts treat as the practice of law include:

• Preparing and filing pleadings, motions, or notices of appeal
• Appearing in court or at administrative hearings on behalf of another
• Giving legal advice to third parties
• Negotiating settlements or legal rights for another person or entity

When a trustee files documents or appears in court “as Trustee of the XYZ Trust,” the trustee is acting in a representative capacity and is therefore practicing law on behalf of the trust.

Civil and Criminal Consequences of UPL

UPL is taken seriously by courts and bar authorities. Consequences can include:

Civil Consequences Include:

• Dismissal of the lawsuit, appeal, or motion (as seen in the Texas case);
• Striking of pleadings filed by the non-lawyer;
• Court-ordered sanctions, attorney’s fees, or costs assessed against the trustee personally;
• Possible personal liability for any damages caused by the unauthorized representation; and or,
• In some jurisdictions, the court may refer the matter to the state bar’s unauthorized-practice committee for sanction.

Criminal and Quasi-Criminal Consequences Include: 

• In many states, UPL is a criminal offense (often a misdemeanor; in some places a felony for repeat or egregious violations);
• Fines and, in rare cases, possible jail time;
• Injunctions prohibiting the individual from further unauthorized practice; and or,
• Contempt of court findings

Even when criminal prosecution is unlikely, the practical damage, lost cases, wasted time, and personal expense. can be severe.

Common Ways Trustees Blunder into UPLHere are real-world situations in which well-intentioned trustees  cross the line:

• Filing a Pro Se Eviction: 
  The trust owns a rental property. The tenant stops paying rent. The trustee, acting as landlord, prepares and files the eviction complaint in the trustee’s own name “as Trustee.” This is classic UPL.

• Appearing as Defendant in a Collection or Foreclosure Case: A creditor sues the trust. The trustee files an answer or appears at the hearing without a lawyer, believing “I’m just defending the trust.” Courts routinely reject this.

• Filing a small-claims action:  
  Someone owes the trust money, or the trustee seeks to recover property belonging to the deceased grantor. Filing the claim “as Trustee” in small-claims court is still UPL in most jurisdictions.

• Responding to a probate or trust contest:  
  A beneficiary challenges the trust. The trustee files pleadings or appears at hearings without counsel.

• Handling code-enforcement or zoning matters:  
  Local government issues notices against trust-owned property. The trustee responds in writing or appears at the hearing on behalf of the trust.

Special Warning for Rental Property Owners

One of the most frequent (and costly) mistakes involves rental real estate that has been conveyed into a revocable living trust.  Once title is held by the trust, the individual owner can no longer conduct evictions pro se. The landlord is now the trust, and only a licensed attorney may represent the trust in court. This is a genuine disadvantage for some property owners who previously handled their own simple evictions. Yet in today’s increasingly complex legal climate, with heightened tenant protections, procedural traps, and potential counterclaims for wrongful eviction, professional representation is generally advisable even when it is not strictly required. A lawyer is far better equipped to navigate the process correctly and protect the trust (and the trustee) from liability.

Practical Recommendations

• Assume that any court filing or appearance on behalf of the trust requires a licensed attorney.
• Budget for legal fees when the trust owns assets that may generate disputes (rental property, closely held businesses, etc.).
• Include clear language in the trust authorizing the trustee to hire counsel and pay reasonable attorney’s fees from trust assets.
• When in doubt, consult a lawyer before filing anything. A short consultation is far cheaper than a dismissed case or a UPL complaint.

Serving as a trustee is a serious fiduciary responsibility. Part of that responsibility is recognizing the limits of what a non-lawyer can do. Protecting the trust, and protecting yourself, means staying on the right side of the UPL rules.

Navigating Guardianship and Trusts: Lessons from In re Gregg for Aging-in-Place Planning

When planning to age in place, seniors and their families must carefully navigate estate planning tools like trusts and guardianships, especially when cognitive decline, such as dementia, raises questions about capacity. The Texas Court of Appeals’ decision in In re Gregg, No. 07-25-00035-CV (Tex. Ct. App. May 29, 2025) offers critical lessons for protecting assets and autonomy while ensuring care needs are met. This case highlights the interplay between guardianship powers, trust creation, and jurisdictional limits, underscoring the need for proactive planning to avoid legal disputes that can disrupt aging-in-place goals.

We advocate for trust-based strategies and clear legal frameworks to support seniors, particularly those with dementia, in maintaining control over their assets and care, thereby preventing such disputes. This article explores the In re Gregg case, its implications, and actionable steps for Ohio and Missouri families to secure their future.

Case Background: A Family Dispute Over Assets

Kenneth Gregg, a Texas farmer with substantial farmland, faced health challenges, including dementia. In 2023. His condition prompted significant estate planning decisions and a subsequent legal battle that reached the Texas Court of Appeals.

Here’s a summary of the case:

• Initial Transfers and Guardianship: In June and October 2023, Kenneth transferred land and cattle to his son, Monte. In December 2023, his daughters sought temporary and permanent guardianship of Kenneth’s person and estate due to his dementia. On December 22, 2023, the trial court appointed daughter Lucretia as temporary guardian of Kenneth’s estate, with limited powers to possess estate assets, spend funds for Kenneth’s daily care, and preserve assets (Tex. Est. Code Ann. § 1151.001).
• Trust Creation: In July 2024, despite his dementia and temporary guardianship, Kenneth created a trust, naming Monte as trustee and transferring all remaining property to the trust. Later that month, Lucretia was appointed permanent guardian of Kenneth’s estate.
• Dispute and Trial Court Order: Lucretia filed a motion in the guardianship action to recover equipment and proceeds, targeting Monte individually, not as trustee. On December 30, 2024, the trial court ordered Monte to return the assets, asserting authority over him in all capacities, including as trustee.
• Appeal via Writ of Mandamus: Monte sought a writ of mandamus from the Texas Court of Appeals, arguing that the trial court’s order was invalid because: (1) it was an impermissible prejudgment attachment, (2) it improperly targeted him as trustee when he was sued only individually, (3) the motion was filed incorrectly within the guardianship action, and (4) the order was vague and overbroad.

Court of Appeals’ Ruling: A Focus on Jurisdiction

The Texas Court of Appeals addressed only Monte’s second argument, finding it dispositive, and conditionally granted his writ of mandamus, ordering the trial court to vacate its return order. The court’s reasoning centered on two key issues:

1. Kenneth’s Capacity to Create the Trust:
   • The court applied Texas Estates Code § 1151.001, which presumes a ward retains all legal rights not explicitly assigned to the guardian. The December 2023 temporary guardianship order limited Lucretia’s powers to possessing assets, spending for Kenneth’s care, and preserving the estate, without prohibiting Kenneth from creating a trust or transferring property.
   • Despite Kenneth’s dementia diagnosis, the court found no evidence that the guardianship order removed his right to create a trust. Thus, the July 2024 trust was validly created, and Monte, as trustee, held legal title to the assets.
2. Jurisdictional Error:
   • Lucretia’s motion was filed against Monte in his individual capacity, not as trustee. The trial court’s order, however, extended to Monte in all capacities, including as trustee, without him being a party to the suit in that role.
   • The court ruled that this overreach rendered the order void, as the trial court lacked jurisdiction over the trust. A writ of mandamus was appropriate because Monte had no adequate appellate remedy, and the trial court’s action was a clear abuse of discretion.

The court directed the trial court to vacate the return order, protecting the trust assets from immediate recovery and highlighting the importance of precise legal procedures in guardianship disputes.

Implications for Aging-in-Place Planning

The In re Gregg case offers critical insights for seniors and families, particularly those in Ohio and Missouri, where aging-in-place planning is a priority:

1. Guardianship Limits and Retained Rights:
   • Like Texas, Ohio law presumes a ward retains rights not specifically assigned to a guardian (Ohio Rev. Code § 2111.02). If a senior with dementia creates a trust before or during a limited guardianship, it may remain valid unless the court explicitly restricts such actions. This underscores the importance of early trust creation to protect assets for aging-in-place needs, such as home care or modifications.
   • Lesson: Work with an elder law attorney to establish a revocable living trust before cognitive decline raises capacity concerns. This ensures assets are managed according to your wishes, even if guardianship becomes necessary.
2. Jurisdictional Precision in Legal Actions:
   • The court’s ruling emphasizes that legal actions must target the correct party and capacity (e.g., trustee vs. individual). In Ohio and Missouri, similar jurisdictional rules apply (Ohio Rev. Code § 2101.24; Mo. Rev. Stat. § 472.020). Failing to sue a trustee in their fiduciary capacity can invalidate court orders, delaying or derailing asset recovery.
   • Lesson: Ensure guardianship or trust disputes are filed correctly, with clear documentation of roles and capacities, to avoid costly legal errors.
3. Dementia and Capacity:
   • Kenneth’s dementia diagnosis in 2023 did not automatically revoke his ability to create a trust in 2024, as capacity is assessed at the time of the act (Tex. Est. Code § 1151.001). In Ohio, for example, the capacity to create a trust requires understanding the nature of the act and its consequences (Ohio Rev. Code § 5804.02). This highlights the urgency of planning before dementia progresses.
   • Lesson: Seniors with early-stage dementia should consult an attorney to assess capacity and create trusts or powers of attorney, ensuring control over assets for home care or other needs. Most laypersons conflate medical diagnosis with legal consequence; capacity and competency are questions of law, and they are determined legally by a judge. There are cases where doctors have deemed a person medically competent or capable, while judges have considered the person lawfully incompetent or incapacitated, and vice versa.
4. Family Dynamics and Disputes:
   • The conflict between Monte and Lucretia reflects common family tensions in guardianship cases, especially when dementia complicates decision-making. Trusts can mitigate disputes by clearly defining asset management roles.
   • Lesson: Communicate estate plans with family to reduce conflicts, and appoint trusted fiduciaries (e.g., trustees) to balance oversight and control.
5. Aging-in-Place Connection:
   • Aging in place requires financial security for home care, modifications, or aides. Trusts, like Kenneth’s, can protect assets from guardianship disputes, ensuring funds for in-home care.
   • Lesson: Integrate trusts with Medicaid planning to preserve assets for aging in place, avoiding the need for nursing home care, as seen in In re Gregg.

Call to Action: Secure Your Future Now

The In re Gregg case underscores the urgency of proactive estate planning to protect your assets and autonomy, especially with dementia risks. Take these steps today to ensure you can age in place with confidence:

1. Create or Update a Trust: Work with an Ohio or Missouri elder law attorney to establish a revocable living trust, preserving assets for home care and avoiding guardianship disputes. Ensure the trust aligns with state laws (Ohio Rev. Code § 5804.01; Mo. Rev. Stat. § 456.4-401).
2. Define Guardianship Powers: If guardianship is needed, specify limited powers to retain your right to manage assets, as Texas law allowed Kenneth to create a trust (Tex. Est. Code § 1151.001).
3. Appoint Trusted Fiduciaries: Name a reliable trustee or co-trustee, like Monte, to manage assets, and communicate plans to family to prevent conflicts.
4. Plan for Dementia Care: Consult resources like the Alzheimer’s Association 24/7 Helpline (800-272-3900, per your Admiral Nurse query) for caregiving support, and explore Medicaid programs (Ohio PASSPORT, Missouri MO HealthNet) to fund home care.
5. Review Legal Documents: Update powers of attorney, wills, and health care directives to reflect current wishes, ensuring clarity in case of incapacity.

Act now to safeguard your legacy and aging-in-place goals. Contact an Ohio or Missouri elder law attorney today to review your estate plan and protect your assets from disputes like those in In re Gregg.