A legal trust can be a very valuable tool to help an individual distribute assets from their estate according to the person’s preferences. However, trusts are also complicated legal devices. To minimize the likelihood of problems, including expensive trust-related disputes, you should consider retaining the services of a knowledgeable, experienced trust litigation lawyer.
Business Estate & Tax Attorneys, P.C., is always prepared to apply our knowledge and courtroom savvy to your situation to help you to reach your desired estate planning goals. If you need the insights of an experienced trust litigation attorney, schedule your consultation today by calling us at (925) 271-4451 or by visiting our contact page.
Understanding the Players in Trust Litigation
There are many interested parties often involved in the administration of a trust, a fact that adds to the complexity of trust litigation cases. Among the stakeholders who are frequently involved in trust litigation matters are the following:
- Grantor – A grantor is the person who creates the trust, funds it with their assets, sets up its rules, determines any beneficiaries, etc.
- Trustee – A trustee is the person who administers the trust on behalf of the grantor. By law, trustees must use the assets of the trust to benefit the beneficiaries, not themselves.
- Beneficiaries – Beneficiaries are the people or institutions who are awarded assets from the trust by the grantor.
- Guardian – A guardian is someone appointed by the trust or by a court to handle the affairs of a beneficiary if they are not old enough to make legal decisions for themselves. Although a guardianship often ends once a beneficiary reaches age 18, some trust restrictions on beneficiary access to the trust assets can last longer, depending on the grantor’s wishes.
Common Disputes That Lead to Trust Litigation
While there are many different circumstances that can lead to trust litigation, there are a few common issues that lead to many court cases. Among these are the following:
- Trust accounting disputes – Trustees have a duty to serve the beneficiaries of an estate by following the terms of the trust as closely as possible. Trustees also have a duty to be honest with beneficiaries. If a beneficiary believes that a trustee is not distributing assets properly under the terms of the trust, the beneficiary may bring a legal action to get an accurate account of how the trustee has managed the estate.
- Mismanagement of trust assets – In addition to an accounting, a beneficiary may also bring an action accusing a trustee of mismanaging the assets of an estate, either accidentally or maliciously. In order to successfully prove that the assets have been mismanaged and need to be returned to the estate, it is typically necessary and important for a beneficiary to contact an experienced trust litigation attorney for guidance.
- Elder financial abuse – Unfortunately, it is not uncommon for family members, friends, health care aides, or others to manipulate an elderly person for financial advantage. In trust litigation, common claims include the allegation that the financial abuser has persuaded the elderly person to cut out certain family members or other beneficiaries from sharing in the trust assets, or by adding the abuser or someone else as a beneficiary when they were not intended to be recipients.
- Trustee theft – In rare cases, a trustee may abuse their position by actually stealing trust assets. If this happens, it is usually essential to retain a competent trust litigation lawyer to help recover any stolen assets, and to remove the trustee to prevent further abuse of the trust.
How Our Firm Can Help Beneficiaries
- Handling communications with the trustee – Before a dispute escalates into litigation, it’s often worthwhile for your estate attorney to communicate with the trustee or the trustee’s attorney about your concerns related to administration of the trust. Communicating through your legal counsel will signal the other side that your concerns are very important and must be addressed while also protecting you from making any potentially damaging statements that could hurt your claim in the long run.
- Getting an accurate accounting of trust assets – Determining the true value of trust assets is often a complex process involving forensic and tax accounting, fair market valuation of estate assets, scrutiny of trust bank records and a host of other steps required under the terms of the state probate code. An experienced trust litigation lawyer can help you make sure that all eligible assets in a trust are accounted for and are properly distributed according to the term of the trust.
- Verifying that beneficiaries receive what they are entitled to receive – If you were named as a beneficiary of a trust, the grantor wanted you to receive your share under the trust. If the trustee has not properly distributed those assets, it may require legal action to recover the assets to which you are entitled.
- Recovering misappropriated assets – If a trustee blatantly steals from an estate or otherwise misallocates assets, legal action will likely be necessary to recover those assets. Removing the current trustee and accounting for the trustee’s breach of duty will almost certainly require litigation.
How Our Firm Can Help Trustees
- Administering the trust – Depending on the estate and the terms of the trust, establishing which assets go to which beneficiaries can be a challenge. If you are the named trustee and you get it wrong, you’re almost certain to face legal action. Why take a chance? Let our experienced attorneys help you if you have questions about your administrative responsibilities.
- Communicating with beneficiaries – Just as beneficiaries can benefit from having an attorney handle any official communication with a trustee, the same is true for trustees themselves. Let your trust lawyer talk to beneficiaries and their legal counsel if there is a dispute or issue that needs to be resolved. Your legal counsel can help you to minimize the likelihood of any problems down the road.
- Providing a full accounting of assets and distributions – If a beneficiary claims that you have not administered the trust properly, the best way to prove them wrong is by providing a full and accurate account of what has happened to any assets in the trust estate. A trust litigation lawyer can help you organize and provide an accounting to satisfy the questions of any unhappy beneficiaries.
- Representing you in court – Should any dispute escalate to a courtroom, our firm will represent you to help establish that you have performed your duties as trustee properly under the terms of the trust.
What to Expect When There Is a Trust Dispute
As with all disputes concerning estates and estate planning, trust litigation can be a lengthy, challenging and emotionally draining process. Probate and trust laws that govern estate disputes are complex, and family tensions can be heightened when addressing trust, inheritance, and related matters. Hiring a competent lawyer can help the process move more quickly and with less frustration for all of the parties interested in the estate matter.