Experienced Trust Litigation Attorneys
RJS LAW is an experienced trust litigation law firm. The firm has achieved positive results representing Trustees, beneficiaries, and heirs in disputes involving:
- Breach of fiduciary duty
- Accounting disputes
- Estate administration
- Fiduciary misconduct and fraud
- Investment mismanagement
- Trustee removals and abuse of discretion matters
- Will and trust contests
How Can Trustees Protect Themselves?
To start, take time to understand the terms of the trust including the beneficiaries and how the assets are to be held, administered, and distributed. Do research, ask questions, consult a trust attorney, and understand the duties and obligations required of a Trustee. It is critically important to understand the risks and responsibilities in determining whether to serve as a Trustee as the liabilities for committing a breach of trust can be severe.
It is the Trustee’s responsibility to administer the trust in accordance with its terms and to act in the best interests of the trust’s beneficiaries. A breach of trust can lead to being removed as Trustee and possible monetary damages.
A few steps a Trustee can do to protect themselves:
- Read, understand, and comply with the terms of the trust instrument.
- Keep detailed records of the trust transactions, time spent, and the rationale used in determining decisions and actions taken.
- Retain a trust attorney to assist and help with the administration of the trust.
Is a Trustee protected?
A Trustee has limited protections afforded under the trust and by law; however, if the Trustee is found to have committed a breach of trust, the Trustee can potentially be held personally liable for any loss.
The terms of the trust must be followed. If the Trustee breaches those terms, even accidentally, the Trustee might find themselves on the wrong end of a lawsuit. Trustees may also be sued for issues such as mismanaging trust property, conflicts of interests, embezzlement, or failing to account or keep beneficiaries informed.
In fulfilling one’s duties as a Trustee, it is considered a best practice to work with an experienced trust attorney to ensure the Trustee’s duties are achieved and overall liability avoided.
What happens when a Trustee does not follow the trust?
If a Trustee does not competently fulfill their duties to the trust, they may be subject to removal for breach of trust.
Under California Probate Code §15642, a Trustee may be removed as provided by the terms in the trust where beneficiaries have a right to remove and replace a Trustee, or the Probate Court can remove a Trustee on its own motion or upon the request of a Settlor, co-Trustee, or beneficiary.
Breach of trust is one of the most common reasons Trustees are removed. Under California Probate Code §16400, a breach of trust may occur when the Trustee violates one or more of their duties, including:
- Duty to comply with the terms of the trust instrument.
- Duty to treat beneficiaries fairly and act in their best interest.
- Duty to maintain trust property separate from personal property.
- Duty to avoid using trust property for their own benefit.
If a Trustee has failed to meet one or more of their obligations, a beneficiary or other interested party may petition the Probate Court to request the Trustee be removed and surcharged for any damage caused by the breach. Once the petition for removal is filed (often preceded by a petition for suspension if warranted), the court will schedule a hearing to determine whether the Trustee should be removed. At that hearing all interested parties – i.e., beneficiaries, heirs, co-Trustees, and/or successor Trustees – have an opportunity to state their position. Depending on the seriousness of the allegations and evidence, the judge may suspend the Trustee and appoint a replacement Trustee pending determination on the removal petition at a later hearing or trial. The court may also order the Trustee to pay money damages to the trust or the beneficiaries in some situations, as well as legal fees and court costs, which is known as a “surcharge” in probate parlance.
When to contact a trust litigation attorney?
Prior to undertaking the role as a Trustee, the best practice to protect yourself and ensure your compliance is to contact a trust attorney as soon as possible. An experienced trust attorney will guide the Trustee as to their legal obligations to avoid actions which could lead to personal liability. Having an experienced trust litigation attorney on the team will help the Trustee as questions and/or issues arise. If you, as a Trustee, have been accused of wrongdoing such as breach of trust, having a competent, experienced trust litigation attorney is important to discuss your legal options and address any potential liability.