Imagine your mother passes away. She created a trust, transferred property into it, named her three children as equal beneficiaries, and appointed one of them to serve as trustee. On paper, it sounds like a reasonable plan.
But then the trustee moves into one of the trust’s homes without paying rent. Substantial renovations are made with trust funds. The trustee seeks to keep that property while resisting another beneficiary’s request to receive the family property across the road.
Years pass, the trust remains unsettled, and the trustee’s personal interests become increasingly entangled with the administration of the trust.
That is essentially what happened in Moffat v. Srebro, a decision issued by the New Hampshire Supreme Court on July 7, 2026. The case offers an important warning for trustees and a useful reminder to beneficiaries that trustees can be held accountable when they place their own interests ahead of their fiduciary responsibilities.
What Happened
Nathaniel Moffat, Matthew Moffat, and Sarah Srebro were siblings and equal beneficiaries of their late mother’s revocable trust.
Among the trust’s assets were two properties in Hancock, New Hampshire. One, 34 Kings Highway, included a colonial home that had been in the family for generations, together with an adjacent parcel containing a barn and garage. The second, 33 Kings Highway, had been purchased for the siblings’ mother in 2020.
Nathaniel was both the executor of his mother’s estate and the trustee of the trust. Before and after his mother’s death, substantial renovations were made to 33 Kings Highway using trust funds. Nathaniel and his wife eventually lived there without paying rent to the trust.
Nathaniel filed a partition proceeding asking the probate court to award him 33 Kings Highway and order the sale of the other property. Sarah opposed that proposal, asserted breach-of-fiduciary-duty counterclaims, and requested that 34 Kings Highway be awarded to her.
After a four-day trial, the probate court awarded 34 Kings Highway to Sarah and 33 Kings Highway to Nathaniel. In determining the value of the property awarded to Nathaniel, the court included the value of the trust-funded improvements and the rental value attributable to the period during which he occupied the property rent-free.
The probate court also found that Nathaniel breached his fiduciary duties by occupying trust property without paying rent and by refusing, without a legitimate basis, to distribute 34 Kings Highway to Sarah. According to the court, his actions elevated his personal interests and biases over his obligations as trustee.
As a remedy, the court ordered Nathaniel to reimburse the trust personally for litigation costs and expenses, including attorney’s fees, paid from trust funds.
The New Hampshire Supreme Court affirmed the property awards and the reimbursement order.
An Important Detail About the Decision
Although the case was heard in New Hampshire, the trust provided that District of Columbia law governed its administration. The Supreme Court concluded that the New Hampshire probate court nevertheless had jurisdiction because the dispute directly concerned the administration, distribution, and accounting of trust assets located in New Hampshire.
The opinion therefore involves both New Hampshire procedural and jurisdictional law and fiduciary duties arising under the law governing the trust.
The Supreme Court also did not independently decide every factual allegation made against the trustee. For example, although deficient trust accountings were among the allegations discussed in the case, the probate court’s express findings of breach rested on Nathaniel’s rent-free occupancy and his refusal, without legitimate justification, to distribute 34 Kings Highway to Sarah.
If You Are a Trustee
Being named as trustee may be an honor, but it is also a serious legal responsibility.
A trustee does not own trust property personally. The trustee controls or manages the property for the purposes stated in the trust and for the benefit of the beneficiaries. That requires the trustee to distinguish between what benefits the trust and what benefits the trustee personally.
Using a trust-owned home as your personal residence without paying fair rent presents an obvious conflict. Using trust funds to improve a property that you expect to receive personally can create additional concerns. Even when a trustee believes a proposed arrangement is reasonable, acting without informed consent, proper documentation, or court approval may expose the trustee to allegations of self-dealing.
A trustee must also act impartially when a trust has multiple beneficiaries. That does not always mean every decision must affect each beneficiary identically, but it does mean the trustee cannot administer the trust based on personal favoritism, hostility, or a desire to improve the trustee’s own position.
Moffat illustrates the potential consequences. The probate court accounted for the financial benefit the trustee received from the renovations and rent-free occupancy, rejected his requested disposition of the family property, and required him to restore to the trust litigation expenses paid from trust funds.
Attorney’s Fees Are Not Always Protected by the Trust
Trustees sometimes assume that because litigation concerns the trust, they may use trust assets to pay all of their legal expenses.
That assumption can be dangerous.
A trustee may ordinarily incur reasonable expenses in properly administering or defending a trust. But when litigation results from the trustee’s own breach of duty or primarily advances the trustee’s personal interests, a court may determine that the trustee—not the beneficiaries—should bear the expense.
In Moffat, the probate court ordered Nathaniel to reimburse the trust for all litigation-related attorney’s fees and expenses paid with trust funds.
The Supreme Court affirmed that remedy because Nathaniel had not properly preserved his objections to the scope of the award. The decision therefore does not establish an automatic rule that every trustee found in breach must pay every attorney’s fee incurred in the case. It does, however, demonstrate the serious financial risk a trustee faces when personal interests drive trust litigation.
Why This Matters to Beneficiaries
A beneficiary does not necessarily have to accept prolonged silence, unexplained expenses, or a trustee’s personal use of trust property.
Depending on the governing law and the terms of the trust, beneficiaries may have rights to information concerning the trust’s administration, its assets, its income and expenses, and distributions that have been made or remain outstanding.
Warning signs may include:
- The trustee refuses to explain how trust money is being spent.
- Accountings are incomplete, inconsistent, or have stopped entirely.
- The trustee is personally using trust property.
- Trust funds are being used to improve property that the trustee expects to receive.
- Distributions are delayed without a clear explanation.
- One beneficiary appears to be favored over the others.
- The trustee uses trust funds to finance litigation that primarily protects the trustee’s personal position.
Not every delay, disputed expense, or unequal distribution proves misconduct. Trust administration can be complicated, particularly when real estate, taxes, unresolved debts, or disagreements among beneficiaries are involved. But beneficiaries are entitled to ask reasonable questions and seek legal advice when the trustee’s explanations do not add up.
What a Court Can Do
When New Hampshire law applies, the New Hampshire Trust Code gives courts broad authority to remedy a breach of trust.
Depending on the circumstances, a court may:
- Compel the trustee to perform required duties.
- Order the trustee to provide an accounting.
- Enjoin the trustee from committing a breach.
- Appoint a special fiduciary.
- Suspend or remove the trustee.
- Reduce or deny the trustee’s compensation.
- Order the trustee to repay money or restore property.
- Impose a lien or constructive trust.
- Grant other appropriate relief.
In a trust-administration proceeding, the court may also award reasonable attorney’s fees and costs when justice and equity require.
The available remedy will depend on the trust terms, the governing law, the nature of the breach, and the harm suffered by the trust or its beneficiaries.
The Practical Lesson
Trusts work only when trustees understand that control of trust property is not the same as ownership of it.
Once a trustee starts treating trust assets as personal resources, places personal hostility ahead of impartial administration, or uses trust money to protect a personal advantage, the trustee risks crossing a serious legal line.
For trustees, the safest rule is straightforward: when a decision may benefit you personally, obtain legal advice before acting—not after the dispute has already begun. The cost of obtaining guidance in advance is usually a small fraction of the cost of defending a fiduciary-duty claim.
For beneficiaries, persistent lack of transparency, unexplained personal benefits, and unreasonable delays should not be ignored. You have the right to ask questions, request appropriate information, and explore available legal remedies.
If you are serving as a trustee or are concerned about the administration of a trust, contact our New Hampshire estate planning attorney for a free consultation.