Lynda ArtesaniLegal Accountant and Data Migration Specialist at The Proper Trust

Financial Misconduct Unveiled - Are Your Funds at Risk?

27 Jun 2025 · 1 min

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In this segment, the speaker outlines two primary forms of fiduciary misconduct involving trust accounts. First, they describe the improper diversion of trust money to cover personal or business expenses such as rent or payroll, emphasizing the ethical duty to alert the client and, if unaddressed, to take further action. Second, they discuss the opposite abuse—intentionally leaving money in a trust to avoid recognizing taxable income for the fiscal year—arguing that this tax‑deferral strategy is equally problematic. The overall message stresses vigilance, reporting, and escalation to protect client assets and maintain compliance.

Chapters

I mean, out of compliance can be a few things. I mean, you could see impropriety. You could see that they're moving money out to pay rent or payroll or whatever. That would be one egregious thing that you could see where ethically we are bound to— I guess you could bring it to— you'd bring it to the client first to say, hey, this happened maybe by mistake. Yeah. And then if it's not addressed and not corrected, and then you see it that it's Probably an issue, then you're going to have to do something. But what about people who just don't transfer the money out and leave it in the trust because they don't want to move money to get paid taxes on it in the fiscal year it was earned? Like, what about that? That's a problem. That's an equal problem, right?