Common Reasons for Trust Litigation

30 December 2020
 Categories: Law, Blog


Setting up a trust for beneficiaries is often a much better option for individuals than simply creating a will. Trusts are funds held within an account and overseen by either a trustor who created the trust or a designated trustee who monitors the trust until the beneficiary can claim it. A number of legal issues can arise from this arrangement even though it can be a beneficial arrangement.

Here are a few reasons why you may need a trust litigation lawyer as a beneficiary of a trust. 

A trustee stole money from the trust

When the trustor places funds into a trust to be held for an eventual beneficiary, the trustee overseeing that trust may or may not have legal rights to use the money. For example, some trusts are set up to care for a minor child after the passing of a guardian. The trustee may have access to the trust money specifically for this cause. However, if the trustee takes money from the trust for reasons beyond benefit for the minor child, it can be considered stealing from the trust. The beneficiary, once they reach legal age, could potentially file a lawsuit against the trustee to recoup what was taken. 

A trustee breached their fiduciary duty 

Breach of fiduciary duty is a legal way of saying someone in a designated position to look out for another party has failed to act in the best interest of the party. For example, if your parents died when you were a minor and a relative became the trustee over your trust, they had a fiduciary duty to make decisions with the trust that were in your best interests. If that trustee borrowed money from the trust, allocated funds from the trust to another account and lost the money, or something similar, the trustee could potentially be sued through trust litigation. 

A trustor who became a trustee misused funds from the trust

A trustor can become a trustee. For example, if two parents create a joint trust for their sole child, and one of the trustors passes away, the living parent would become the trustee over the trust even though they are essentially still a trustor. In these instances, it becomes the fiduciary duty of the trustee to ensure the trust is distributed as previously arranged. If the surviving parent uses the funds without legal allowance, the sole beneficiary could potentially file a lawsuit once they reach the required age to access the trust.