Should stealing from a child' trust fund, which often happens when parent are trustees, have the same penalty as stealing the same amount from a bank?

[Kelley1]

Parents /Guardians On Occasion Steal Trust Funds From Their Children

How to protect a child’s education savings from greedy adults?

Dear Liz: I understand that money for children’s college education can be put in a bank account with a parent as the trustee under the theory (I suppose) that the child might make bad decisions. In my case, money that I had worked hard for was put into a custodial account and then used by my parents for “necessary” household expenses. My family was not impoverished. This was a dreadful memory for years, and I’m not the only one. Social Security money for a relative, a child, was lost in a divorce. In another case, money was given to a parent for education, but was used in a failed real estate deal, with the children never realizing the money was meant for them. How can money be invested for a child’s education without it being available to an adult for “necessities”?

Answer: When parents take money that belongs to their children, they may not think of it as stealing. But that’s exactly what it is, legally and, of course, morally. There are clear rules for custodial accounts and trusts that should prevent such self-dealing, but often the child’s only recourse would be to sue the parents. That could make for some awkward Thanksgiving dinners.

There wasn’t much you could have done as a child to prevent the theft. But if you ever want to give money to another child, think carefully about the integrity and ability of the person you’re putting in charge of the money.

First pay attention to how they handle their own money. Someone who’s deeply in debt or living paycheck to paycheck may not have the skills to be a good steward.

Then ask yourself, “Could I see this person taking the money if they were really hard up for cash or could otherwise justify it to themselves?”

Then pay attention to your gut reaction. If you believe the person has integrity, that doesn’t mean something bad can’t happen, but you’ve certainly reduced the odds.

[InknKink]

I had a very wealthy uncle who passed away several years ago and left a trust to both his daughters. Their mother took a lot of said money to do exactly what you mentioned here, buy a house and maintain the lifestyle she had been living prior to his passing.

She didn't look at it as theft because she had to financially support the kids. The issue was she attempted to do so not on her own salary, rather with the money left to her daughters.

Her daughters sued and won. It destroyed their relationship with their mother and only recently have they been slowly repairing it. Although, things will never be what they could have been prior to their mothers greed.

For context, their father and mother divorced three years prior to his passing. He left nothing for her in his will. Everything went almost exclusively to his daughters.

[AngryCarl2]

Should be a greater penalty. Banks money was already stolen from taxpayers.

[Gwendoline]

Largely depends. I mean the disabled child needs a place to live and if the house is going to be left to them in the will I dont see a problem.

I know a disabled girl whos parents used her trust fund to buy her a good house in her name near them which they rented out and when the child came of age she had a home she could choose to move into.

[Kelley1]

The question is stealing from a trust. What you describe is not theft.

[Kelley1]

Actually, unless it was only several months (expenses) vs. 15 years, it would be theft if the parents kept the rent money, but not if they put the rent money into the trust.

[Gwendoline]

The rent money may be paying for the mortgage. Trust money is just money thats sits regardless of inflation

[FateofOphelia]

No to me that's extreme