These types of conflicts are often called trust disputes, trust litigation, or fiduciary litigation and often involve a trust litigation attorney.
Typically, the situation will concern one or more trust beneficiaries who are dissatisfied with the trustee’s actions or inactions.
There are a number of ways that a trust dispute can begin.
Below are a few of the most common scenarios that our probate and trust litigation attorneys see.
Common Ways that Trust Disputes Begin
Lack of communication by trustee.
Trust disputes often start when the trustee fails to communicate with the trust beneficiaries about the trust’s status or respond to beneficiaries’ inquiries.
Sometimes, this involves the trustee failing to make reports to the beneficiaries at the times that the trust requires.
Other times, it involves a trustee who refuses to communicate or provide information even after the beneficiaries have specifically requested it.
Reports do not look right.
Sometimes, the trustee produces a report to the beneficiaries that looks odd or has unrelated numbers.
When the beneficiaries inquire further about it, the trustee may not communicate at all, or the response may not make sense at all.
Distributions decrease or stop altogether.
When the amount of a distribution changes unexpectedly or the trustee does not provide funds for an extraordinary expenditure, a beneficiary may become upset or suspicious about the trustee’s activities, which can sometimes lead to conflict.
In addition, an unexpected halt or decrease in regular distributions can serve as an early warning sign to beneficiaries that something odd is happening with the trust.
The belief that the Trustee is treating some beneficiaries differently than others.
This type of conflict tends to arise when the trust has
- current beneficiaries, who receive distributions from the trust now, and
- future beneficiaries (sometimes called contingent), who will receive something from the trust later (which is often what is left over after the current beneficiaries pass away).
The trustee has a duty to balance the interests of the different beneficiaries in accordance with the instructions contained in the trust.
If one set of beneficiaries believes that the trustee is inappropriately putting the interests of some beneficiaries over others or some undue influence is involved, a dispute will often ensue.
Property missing.
An obvious way that a trust dispute can start is if a beneficiary finds out that the trustee has improperly transferred property that is supposed to be owned by the trust.
Sometimes, beneficiaries may not know for sure that property has been taken but may suspect it based on the trustee’s other behavior.
The death of a beneficiary.
A trust dispute sometimes breaks out after a beneficiary has died.
This is most common in situations where the trust was created by the now-deceased beneficiary (typically an elderly parent), and someone else managed it.
After the elderly parent passes away, the family and other beneficiaries find out that the trust was being mismanaged or that the trustee was siphoning off trust assets.
Most of the time, the complaint raised by the beneficiary will involve allegations that the trustee has breached a fiduciary duty.
The trustee’s fiduciary duties require that the trustee always act in the best interests of the trust and the trust beneficiaries.
Except in the most extreme cases, the trustee will often believe that he or she has done everything correctly.
In those cases, the trustee must defend the allegations brought by the beneficiaries because if the trustee is found at fault, the court can impose numerous penalties, ranging from removing the trustee and appointing a new trustee to requiring the trustee to use personal funds to pay money into the trust.
Work with a Professional Trust Litigation Attorney
Regardless of what causes the conflict, there are many different options available to work it out.
Sometimes careful negotiation is appropriate and can resolve the situation quickly.
Other times, active, aggressive litigation is necessary. Which solution will work best for your situation will depend on your particular circumstances and what you want to achieve at the end of the case.
If you are a beneficiary, that may involve getting an accounting of all trust assets or having the trustee removed and a new trustee appointed.
If you are a trustee, your responsibilities may include helping beneficiaries understand your decisions and defending allegations of improper actions.
Whatever your situation now is, our experienced trust and probate lawyers will help you analyze it and give you the best options to achieve your goals.
If you would like to speak with our experienced Georgia probate team about your particular situation, please contact our office to set up a private, confidential consultation.
We have helped over 1,000 families with probate and trust litigation matters. Schedule a confidential consultation with an experienced trust litigation attorney to learn how we can assist you.