Put simply, a breach of fiduciary duty occurs when the person who has been designated to act in the best interests of someone else fails to do so. A beneficiary should gather evidence and consult an experienced attorney to determine the best action. If the grantor left a will instead of a trust, or died without a will or a trust, you may have rights as an estate beneficiary rather than as a trust beneficiary. Comprehensive Guide to Inheriting Homes in California. You are entrusted with the responsibility of ensuring that the testator's wishes are carried out, and their At Hess-Verdon & Associates PLC, we pride ourselves on being the most dependable and sophisticated trust and probate litigation firm in California. Fiduciary duty calls out to be transparent and gives updates to beneficiaries and heirs. Courts place a lot of trust in trustees. It is suspected undue influence or fraud played a role in the creation or execution of the trust. Despite the broad rights trust beneficiaries have, they are not entitled to play an active role in every decision the trustee makes about the trust. Furthermore, the trustee must always act with impartiality, meaning they must never favor one beneficiary over another, or make any decision that benefits one beneficiary to the detriment of another. For a step-by-step guide to everything you need to know to manage a trust, the book The Trustee's Legal Companion by Liza Hanks and Carol Elias Zolla (Nolo) is a very helpful resource. In a perfect world, trustees would never abuse their position for personal gain, but it is an unfortunately an all-too-common occurrence. Valid reasons for trust beneficiaries suing a trustee include: never use trust assets for your own use, and. With trusts, it occurs when the trustee fails to act in the best interests of the trust beneficiaries. Trust beneficiaries may bring a claim against a trustee so long as they have a valid reason. You can't, however, sue a relationship such as a trust. Unhappy beneficiaries can get their own attorneys to help them advocate for them in the trust administration processthough if you keep them informed and engaged, they shouldn't need to. Having Your Home in a Trust is a Smart Financial Decision! Even those with the power of appointment can only alter the distributions. You'll be providing regular written reports (called "accountings") that detail all financial transactions, but it's a good idea to keep informal lines of communication open, too. played a role in the creation or execution of the trust. A trustee does have a fiduciary duty to the trust beneficiaries. Trustee malfeasance refers to any type of negligent, self-serving, erroneous, or retaliatory conduct committed by the trustee of a trust resulting in harm to trust assets or beneficiaries. In all of these scenarios, the trustees actions amount to a breach of duty so suing the trustee with help from a probate lawyer would not just be warranted but recommended. RMO LLP serves clients in Los Angeles, Santa Monica, Orange County, San Diego, Kansas City, Miami, and communities throughout California, Florida, Missouri and Kansas. That means being sure to: Don't feel that you must give in to every request that a beneficiary has. Please reference the Terms of Use and the Supplemental Terms for specific information related to your state. Trustees must always keep a detailed and transparent accounting of all transactions relating to trust assets, so if the trustee is unforthcoming with documentation, or the numbers dont seem to add up, it may be a warning sign that a trustee is diverting funds to personal accounts or for personal expenses. If the grantor left a will instead of a trust, or died without a will or a trust, you may have rights as an estate beneficiary rather than as a trust beneficiary. If so, you may demand information from the trustee by following these steps: Suing a trustee for mismanagement is a daunting process. They may even be able to seek punitive damages. If you suspect that a trust was set up for any such reason, contact a trust litigation lawyer right away. However, this is not always the case, the beneficiary can always be removed if it is a revocable trust. Once a trust is irrevocable, a trust beneficiary can neither be added nor removed. A trustee's job is to manage, hold and distribute trust assets in favor of beneficiaries. What to Consider! This means that the trustee may not transfer their responsibilities or task someone else with performing the duties that the trusts creator specifically intended for them to carry out personally, and if they do they will still be responsible for their agents acts. How to Get Along With Beneficiaries When You're a Trustee | Nolo The Keystone Quarterlyisa must-readfor attorneys and clients alike. and suspect the trustee of misconduct, mismanagement, or negligence, you are probably wondering: ? Consider when one spouse passes away, the living spouse of the decedent is frequently named executor. Limit the scope of the meeting to a discussion of what the trust instrument says and how trust administration works. Beneficiary designation disputes in trusts can be tricky because designated beneficiaries generally take control of the asset at issue upon the asset owners death, long before the trustee has had opportunity to claim it. Schedule a free consultation today with one of our beneficiary representation lawyers to learn how we can help. The trusts creator is sometimes called a, First and foremost, the trustee has a duty of loyalty. Consult with an experienced, Are you looking for an estate litigation attorney in your area? to remember that trustees have a fiduciary duty to act in their best interests at all times; if a trustee fails to do so, they are entitled to bring a claim against the trustee. Especially if youve asked to see supporting documents which they continually refuse to provide. If the trustees actions fall under any of the categories mentioned above or are questionable in any way, it is important for. What to do if the Trustee (my brother) is harassing me (a beneficiary All you need to do is: Thats it! Manage and preserve trust property in a prudent manner, including the duty to. We get the question, time to time, how do I as a trustee make a big decision that impacts the trust from a financial standpoint and get protection for making that decision so that the trust beneficiaries dont later on down the road sue me for that decision? Our founder, Scott E. Rahn has been named, Top 100 Trust and Estate Litigation by SuperLawyers, , Trusts and Estates Litigator of the Year, and Best Lawyers in America for Litigation Trusts and Estates. But in our experience, trustees who engage in this behavior are just as likely to get fatigued and capitulate. During administration, you will be dealing either mostly or exclusively with the trustee, so you should familiarize yourself with the ways in which trustees can breach their duties. And it's quite common for one adult child to be the trustee and all the siblings as well as the trustee to be beneficiaries of their parents' trusts. Newport Beach, California, 92660. Failure to do so can lead to mistrust and potential legal action. When trustees can be sued. This means that they can take legal action against a beneficiary if it comes to light that the beneficiary may have engaged in misconduct that harmed the estate. Suing for Wrongful Involuntary Commitment. It is important to keep in mind that disliking the terms of a trust is not considered a valid reason for bringing a contest, nor can a contest be brought by someone who does not have financial stake in the outcome of the trust contest. Charitable Remainder Trusts Understanding Charitable Remainder Trusts A charitable remainder trust (CRT) is an excellent estate planning tool for those who wish to give back and support their favorite charitable organizations while still providing for their loved CAN AN EXECUTOR DECIDE WHO GETS WHAT? Is it true that an executor cannot be a family member or friend? Five Keystone Partners Named as Super Lawyers in 2023, Our Partner Retreat: The Perfect Combination of Work and Fun. Disputes can arise when certain payable-on-death or transfer-on-death assets with designated beneficiaries are included in a trust. Use an Expert Trust Litigator Suing a trustee of a trust can be a complicated and challenging process. And while a trustee may need to employ professionals in certain circumstances, trustees generally have a duty not to delegate. We are here for you. A beneficiary can sue a trustee if they have legal Standing and can demonstrate that the trustee has breached their fiduciary duty, mismanaged trust assets, or failed to provide information or accountings. Before diving into the specifics of whether a beneficiary can sue a trustee, lets clearly understand trusts and the roles played by beneficiaries and trustees. Trustee malfeasance refers to any type of negligent, self-serving, erroneous, or retaliatory conduct committed by the trustee of a trust resulting in harm to trust assets or beneficiaries. What Is a Breach of Fiduciary Duty Lawsuit? Defending a Trust Contest in California Understanding Trust Contests What is a Trust Contest? The best way to relieve beneficiaries' concerns is to: You are required (by law) to keep beneficiaries reasonably informed about how trust assets are being managed.