Litigation – The Trust Litigation

A trust is a legal creation whose purpose is to hold assets and then distribute those assets upon that person’s passing. There are many types of trusts and there are many types of trust litigation. The types of litigation I see most commonly involve a couple of different things.

  1. Probably the most common one is beneficiaries usually blood relatives of the person who’s passed away who at some point in time were beneficiaries of a trust then near the end of that person’s life the decedent’s life the blood relatives are written out of the trust.
  2. A lot of times this occurs under suspicious circumstances. The person may have lacked capacity. They may have been very sick. Someone may have isolated them and been encouraging them to change their trust. Usually, when those things occur it’s because the person encouraging them wants to become a beneficiary.
  3. A very common one is when an elderly person has a second wife or second husband and the testator excuse me the decedent who created the trust originally had biological children. The stepparent takes some type of action to have the biological children removed from the trust and the stepparent becomes the primary beneficiary of the trust or the stepparent and the stepparent’s children become the primary beneficiary of the trust. That is often times a circumstance in which I would advise someone to consider trust litigation. It might be appropriate to challenge that trust.
  4. Another type of very common trust litigation involves wrongful acts pertaining to the trustee. Trustees have certain duties under Florida law. Under Florida, law trustees owe a fiduciary duty to the beneficiaries. Meaning they’re supposed to run the trust in accordance with the trust terms and for the benefit of the beneficiaries.
  5. As part of that trustees are required to give what’s called an annual accounting. It is a document and it’s required by Florida statutes and what is required to be in it is in Florida statutes and it tells all the beneficiaries this is what’s in the trust this is what’s happened to all the various assets over the course of the last year and if this is not done that is a breach of a fiduciary duty.

During these accountings or sometimes lack of providing these accountings, beneficiaries may discover some strange costs or some highly elevated expenses. These are circumstances in which someone may consider challenging an accounting which would be considered trust litigation or if it rises to a particularly bad level perhaps trying to remove the trustee.

Some circumstances where you may consider removing a trustee would involve you know excessive trustees fees or self-deal where the trustee is using trust money to fund his or her own company or something along those lines. These are some common circumstances I see routinely in which people engage in trust litigation.

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