Establishing a trust is one of the most thoughtful ways of ensuring effective estate planning after your demise or if you become incapacitated. A trust is a legal document involving a trustor, trustees, and beneficiaries. The trustor is the person establishing the trust. Trustees are persons or entities you leave or entrust with the duty to manage the assets in the trust. They carry out your instructions, pay off debts, make investments, keep confidential records, and distribute your assets among beneficiaries if you didn't make any clear wishes. Beneficiaries are the recipients of the assets in your trusts, e.g., your children and spouse. Despite establishing a trust, several issues may arise, leading to trust litigation. This piece discusses the problems that result in trust litigation and how an attorney can help.
What Causes Trust Litigation?
Trust litigation refers to disputes between trustees or beneficiaries relating to the execution of the trust that ends up in court. Below are common causes of trust litigation.
Doubts on the Legitimacy of the Trust
One of the main issues that result in trust litigation is parties contesting the legitimacy of the trust. That can be due to several reasons. First, there could be disputes as to whether the trustor created the trust. Second, there could be claims of fraud and coercion when establishing the trust and its directives weren't the true wishes of the trustor. Lastly, people can question the legality of the trust if there are claims that the trustor couldn't establish it, e.g., they weren't of sound mind when they created the trust.
Breach of Fiduciary Duty by Trustees
Trustees must execute a trust based on the trustor's true wishes and efficiently manage and fairly distribute the assets among the beneficiaries. Any wrongdoing and failure to perform their duties can result in trust litigation. For example, there could be claims that a trustee acted unfairly in distributing that estate, especially if they're also part of the beneficiaries. The other beneficiaries can move to court to challenge the asset distribution.
Disagreements Between Trustees
Trusts have multiple trustees, especially those involving a large pool of assets. The trustees may disagree on the interpretation of terms under the trust, how to manage it, and the best approach to distributing it among the beneficiary. That may result in litigation to help solve and clear the misunderstandings.
How Can an Attorney Help?
A trust litigation attorney is a lawyer with experience in handling trust disputes relating to trust management. They represent both parties in trust litigation to ensure proper execution of the trust. Without attorney representation, it is likely to make costly mistakes that may result in losses and mismanagement of trust.