Illinois  |  Wills and Trusts

Hi. I'm assuming from your facts that father-in-law set up a living trust and appointed Sister as trustee. Trustee's job as trustee is to act solely on behalf of and for the benefit of father-in-law. If they are reimbursing themselves for trust-related expenses they advanced, that should be ok. If they are using trust money to pay for their personal expenses, that is not ok.

It all should depend on the language of the trust. Typically a living trust would allow for funds to be used for the grantor (the person establishing the trust), and his spouse and minor children. Having funds be used for an adult child would be rather unusual.