Call Today 480-348-1590

Trust Litigation

Becoming a Trustee carries with it many responsibilities and is a challenging job. Most trusts nominate a family member to serve as trustees and most people do not have any prior experience acting as a trustee. The trustee may not realize that they can be liable for the their actions as trustee. The lack of experience acting as trustee can lead to mistakes in administration and mistrust between the trustee and the beneficiaries. Sadly, some trustees do take advantage of their position including misusing or stealing trust assets.

Most trust litigation falls into two categories. Legal actions accusing the trustee of wrongdoing and lawsuits regarding the Trust document itself.

 

Trustee Wrongdoing

Trust Validity Challenges

Compelling Trustees to Account

Removal of Trustees

Obtaining Trust information

Compel Return of Property To Trust

Misappropriation of Trust assets

Failure to prudently manage the Trust

 

Modification of Trust by Consent of the Beneficiaries

Modification or Termination for Changed Circumstances

Disposition of Trust Property on Termination

Invalidate a trust amendment on forgery and undue influence

 

Trusts are not typically supervised by the Court so there is no official enforcer of the trustee’s job. The Trustee is accountable to the trusts beneficiaries. If a beneficiary feels that his or her rights are not being protected, or who feels that the wishes of the deceased are not being upheld, has the right to file a claim against the trustee.

It can be difficult to recognize if the Trustee is violating their duties. Typically, an breach of trust case is brought against a trustee by one of the beneficiaries, since they are the ones who suffer or are harmed by the trustees mistakes.

Here are a few common examples of cases we see:

  • The trustee’s finances are mingled with trust accounts. The trustee must make every effort to create distinction between personal and trust funds, if this is not done, it constitutes a breach. 
  • Conflicts of interest in which the trustee may have personal reasons to act in a way that goes against the wishes of the deceased and best interests of the beneficiaries.
  • Using the trust like a personal bank account. A trustee must not profit from the trust, borrow from the trust, or any number of other transactions that would benefit the trustee personally.  
  • The Trustee fails to act to stop a co-trustee or other responsible party from acting in a way that constitutes a breach of trust.
  • The Trustee fails to communicate with the beneficiaries. It appears nothing is happening to move toward trust distributions or an accounting has not been provided.

What is a no-contest clause?

A no contest clause is a provision of a Trust that imposes consequences on a beneficiary if that person a challenges the terms of the Trust. This does not mean that a beneficiary can’t dispute the Trustee’s actions or shouldn’t ask the Trustee questions about the administration of the Trust.

Is there a difference between a current and remainder beneficiary? A current beneficiary is a person who has the right to receive income or principal distributions from a trust.

If I am a beneficiary of the trust am I entitled to information?

Yes, but how much depends on a number of factors. If the trust is revocable the settlor can revoke it at any time so the trust beneficiaries have few rights until the settlor dies. Upon the settlor’s death the trust become irrevocable. The following are common rights given to beneficiaries of irrevocable trusts (these vary by state):

  • Payment. Current beneficiaries have the right to distributions as set forth in the trust document.
  • Information. Current and remainder beneficiaries have the right to be provided enough information about the trust and its administration to know how to enforce their rights.
  • Accounting. Current beneficiaries are entitled to an accounting.
  • Remove the trustee. Current and remainder beneficiaries have the right to petition the court for the removal of the trustee if they believe the trustee isn’t acting in their best interest.

These are emotionally and legally challenging cases involving an analysis of the factual circumstances as well as the law. Kile and Kupiszewski law firm handles all types of probate disputes, including will and trust contests either to challenge the will or trust or to defend the will or trust. We also have experience with financial exploitation matters and will evaluate your case for that claim as well. If you believe that an estate document or property transfer was the result of undue influence or if you have questions regarding a probate dispute, please contact us at 480-348-1590.

 



Get In Touch With Us




[recaptcha class:contact-inputcpt]

IMPORTANT LEGAL NOTICE:

By filling out this form and clicking submit I hereby agree that I am not a client of Kile & Kupiszewski Law Firm for this submitted matter until I or involved parties sign a written agreement with the Firm. You understand that the information that you send via this link will be used to check for conflicts and may not be kept confidential.