What is Trust Litigation?

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The terms and conditions established in a trust and the management of it by the trustee are often sensitive issues. As such, it is not uncommon for the family members of a loved one who has created this type of legal document to sometimes find fault or issue with the trust or the trustee. Other times the terms are not clear or circumstances have changed such that the trust is no longer a viable mechanism to accomplish its intended purpose. As a result, litigation may be necessary to construe the trust, to alter or modify its terms, or otherwise to resolve the issues arising out of it.

Bringing a Case to Court

Litigation is often filed and trusts are contested when family members or beneficiaries have reason to believe that the creator of the trust lacked the necessary level of mental capacity to create the trust. Circumstances also arise in which loved ones may suspect that the trust was created based on undue influence or manipulation by someone whose actions were driven by the desire to get a greater benefit for themselves under the trust. Other instances in which litigation may be necessary in order to resolve matters involving a trust are:

  • Payment was made to the wrong beneficiaries
  • Excessive payment made to a proper beneficiary
  • Payment failed to be made to any beneficiaries
  • The trustee failed to determine the value of assets prior to sale
  • The trustee mismanaged the trust assets
  • The trustee used the trust assets for his own benefit
  • The trustee failed to provide proper reporting and accounting
  • Fraudulent or improper conduct in the creation of the trust

Breach of Fiduciary Duty

Litigation involving trusts often includes a claim that the trustee engaged in conduct that constitutes a breach of fiduciary duty. In some circumstances the trustee could be held personally liable for the damages caused by the breach.

Creating a trust and then carrying through the intentions of that trust are matters that should be attended to with the help of a skilled probate attorney. If you find yourself involved in litigation over any issue involving a trust you should seek legal counsel who is experienced in litigating such cases.