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Biddle Law Estate Planning Blog

Wednesday, April 11, 2018

In Focus: Trust Disputes

What are the most common types of trust disputes?

Trusts have become one of the most popular estate planning tools, and for good reason. A trust allows the trust creator (the trustor) to entrust assets to a named trustee for the benefit of the beneficiaries. Trusts do not need to go through probate when the trustor dies, thereby preserving the trust assets, keeping the trust private, and saving beneficiaries considerable time. Despite the many benefits of a trust, at times disputes will arise between the beneficiaries and the trustee or the beneficiaries and the trust itself. Our San Mateo trust administration lawyers explore the most common types of trust disputes below.

Common Types of Trust Disputes

Sadly, disputes will often arise when money is involved. A trust dispute is a disagreement between parties affected by a trust. Some trust disputes are fairly minor and can be resolved through mutual agreement, while others will need court intervention and may involve considerable time and money to cure.

Some of the most common trust disputes are as follows:

  1. Challenges to the legal capacity of the trustor: In order for a trust to be valid, the trustor must be of sound mind at its creation. When a trustor is elderly, beneficiaries will at times question whether he or she had the legal capacity to make the trust. Evidence could be submitted by the trustor’s physician, family members, and others who would attest to the testator’s state of mind.

  2. Questions as to coercion: Trust provisions that were created while the trustor was under undue influence will not be legally valid. Undue influence involves extreme pressure or coercion by another person. At times, this could involve a trustee taking advantage of an elderly loved one.

  3. Concerns of fraud: A trust that was signed fraudulently must be struck down. On some occasions, a relative or other party could forge the signature of someone else to create or amend a trust.

  4. Mismanagement of trust funds: The trustee is charged with providing a proper accounting of assets to the beneficiary and managing the funds for the benefit of the beneficiaries. If a trustee does not provide an accurate account, fails to invest funds wisely, or mixes his or her personal assets with the trust, it may lead to serious disputes.

Remedies for trust disputes vary, with some matters being resolved by majority vote, while others may require court involvement. All trust disputes are complex and require careful examination by an experienced lawyer. Contact a trust administration attorney for assistance with your potential trust dispute.


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