One of the primary purposes of a trust is to provide the organized distribution of property from one generation to the next. A trust lets you decide now which belongings you want to be given to whom. As with any other legal proceeding, there may be issues with a trust that will require trust litigation. If you are trying to determine whether suing a trustee of a trust is necessary, discuss your situation with a trust litigation attorney to decide what should be done.
Reasons Suing a Trustee of a Trust May Be Necessary
If it turns out that the person who created the trust may have lacked the legal capacity to do so, there may be a need for litigation to determine whether the trust is actually valid. The same is true if there are questions as to whether was coerced into creating the trust or including certain provisions in the trust. If there was undue influence or persuasion that may have inhibited the maker’s free will, then litigation may be necessary.
Common Types of Trust Litigation Matters
There are a wide variety of situations in which a Trustee may find himself in court on behalf of a trust or estate. It could be that the trustee must initiate the lawsuit based on the wrongdoing or negligence of someone else. On the other hand, a trustee may be required to represent the trust or estate in defense of a claim brought against it by another party.
Common Actions Against Trustees
Some of the most common legal issues for which people consider suing a trustee of a trust include compelling trustees or executors to account, proceeding to surcharge trustees or executors, removal of trustees or executors, obtaining trust or will information, prohibited transferee care custodians.
Other common types of claims involving the modification or termination of trust documents include modification of trust by consent of the beneficiaries, modification or termination for changed circumstances, disposition of trust property on termination.
What to Do to Avoid Trust Litigation
Disagreements over a trust and how the assets are managed and distributed can be agonizing and expensive. Trustees and beneficiaries have disputes, family members and friends fight, and if the issues can’t be resolved, the parties may eventually take their disputes to court. That’s when trust litigation can become an issue.
Carry Out Your Duties Properly
A trustee needs to be responsible and honest in managing assets, which includes giving accounts to beneficiaries regarding the trust contents; often, litigation arises from an accusation by a beneficiary that a trustee is guilty of mismanagement or lack of transparency. Keep detailed and organized records of everything related to the trust. It’s also best that you obtain the assistance of a reputable lawyer with trust management.
Be Sure the Trust Documents are Not Ambiguous
Before taking on your duties as a trustee, it is a good idea to make sure that the trust agreement was properly drafted so its terms are clear. Any ambiguities that may lead to a dispute among beneficiaries need to be resolved as soon as possible.
Be Prepared for Likely Sources of Concern
If there is a particular asset or trust provision that will most likely become a source of dispute, then special care may be required to handle those issues. There could also be a particular beneficiary who is more likely than others to cause problems for the trustee. Taking these issues into consideration ahead of time and discussing them with the grantor will make it easier to avoid trust litigation.
Be Sure the Trust Documents are Updated if Necessary
If the documents are outdated or significant changes in life circumstances necessitate modifications, those changes need to be made as soon as possible. Otherwise, you will ultimately have major issues. Your legal documents should be kept current. That means, if you need to update the beneficiaries on your life insurance policies or if there has been a divorce, appropriate changes need to be made.
Be Sure to Communicate with Parties Involved
Litigation often results from someone who may have been a beneficiary of a trust, no longer being a part of it. When individuals find out that they were either disinherited or they will not receive what they thought they should have received, disputes will undoubtedly arise. If a family wants to avoid arguments after a death, everything should be discussed ahead of time. No one wants to be surprised.
Join us for a free seminar today! If you have questions regarding estate planning, trust contests, or any other trust administration issues, please contact the Schomer Law Group either online or by calling us in Los Angeles at (310) 337-7696, and in Orange County at (562) 346-3209.
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