1. Remedies Against Trust Property

2. Tracing into Commingled Account Trustee’s $Trust’s $Acc’t Balance Opening Balance (that is, before Trustee turns evil) 5000

3. Tracing into Commingled Account Trustee’s $Trust’s $Acc’t Balance Opening Balance5000 Trustee embezzles $300500300800

4. Tracing into Commingled Account Trustee’s $Trust’s $Acc’t Balance Opening Balance5000 Trustee embezzles $300500300800 Trustee withdraws $400100300400

5. Tracing into Commingled Account Trustee’s $Trust’s $Acc’t Balance Opening Balance5000 Trustee embezzles $300500300800 Trustee withdraws $400100300400 Trustee withdraws $3000100

6. Tracing into Commingled Account Trustee’s $Trust’s $Acc’t Balance Opening Balance5000 Trustee embezzles $300500300800 Trustee withdraws $400100300400 Trustee withdraws $3000100 Trustee deposits income tax refund of $600 600100700

7. Subrogation Trust Property 1. Trustee embezzles $1,000 2. Trustee uses money to pay secured/priority creditor Trustee’s Secured/Priority Creditor 3. Beneficiary is subrogated to rights of “paid off” creditor 4. B uses rights of creditor against Trustee and Trustee’s other creditors

8. Marshalling Example Trustee personally owns two assets: Asset A = $10,000 Asset B = $6,000 Beneficiary has claim for $5,000 against Asset A via subrogation due to Trustee’s embezzlement; no claim against Asset B Creditor has priority claim against both assets totaling $10,000.