The Basics of Trust Litigation
A skilled trust attorney can make all the difference in reaching a favorable resolution to your trust dispute, particularly when the administration of the trust is complicated. Regardless of whether you are a trustee, beneficiary or heir, the trust lawyers at Keystone Law Group can help enforce your rights and resolve any trust disputes that arise.
We’ll answer these questions and more in the following guide to trust litigation. Reach out to the team at Keystone Law Group for more information today.
To understand trust litigation, one must first understand the purpose of a trust. A trust is created by one party (trustor) who transfers assets to a responsible person or entity (the trustee) for the benefit of designated persons (beneficiaries).
Trusts are intended to be private — unlike wills, which are subject to probate (i.e., court supervision). The courts only rule on trust matters when certain aspects of a trust are being disputed by the parties involved.
Trust litigation is a catchall term describing all trust-related actions brought to court.
If the decedent had a will instead of a trust, or did not have a will or trust at all, then you may need our estate litigation services.
It is no small responsibility to be the trustee of a trust, especially if you are the successor trustee, who becomes trustee after the trustor (the trust’s creator) dies or becomes incompetent. Between securing a copy of the trust, understanding its terms, marshaling its assets, gathering information about its outstanding debts and fulfilling obligations to beneficiaries – all duties with potential pitfalls – it is easy to get overwhelmed.
Having a trust attorney in your corner to handle any trust disputes that arise and provide guidance through every step of the trust administration process can help ensure things progress smoothly and no mistakes are made. See below for some of the ways trustees could benefit from the counsel of a trust litigation lawyer.
One of the key duties of a trustee is maintaining an accurate, penny-for-penny accounting of every asset that enters and exits a trust. Trust beneficiaries are entitled to this information and may request it from trustees during the administration process.
Trustees may also be responsible for submitting formal accountings to the court once a year, every time there is a change of trustees or when a trust is terminated. Below are some of the ways trust lawyers can help with trust accounting.
Countless types of trust property disputes can arise over the course of trust administration. A qualified trust litigation attorney can help trustees and trust beneficiaries litigate or defend against such claims.
Below are some of the circumstances that can cause trust disputes.
When a trustor dies, the successor trustee should obtain copies of the trust to provide to the trust’s beneficiaries and any heirs who were excluded from the trust. The trustee, beneficiaries and heirs will have the opportunity to examine the trust instrument with their trust attorney.
Any involved party may bring what is called a trust contest to invalidate some or all of the trust if they believe the entire trust, or a portion of it, is invalid. Some of the more common grounds for bringing a trust contest are discussed below. Get in touch with a trust dispute lawyer to discuss your options and craft a trust litigation strategy if you believe you have grounds for bringing a trust contest, such as:
Courts are not sympathetic to trustee negligence since trustees have an abundance of resources (e.g., trust attorneys, financial advisers and accountants) at their disposal to help them through the administration process.
Trustees who breach their duties can be held personally liable for damages (“surcharges”) if they compromise the trust’s resources in any way, and they can be suspended or even permanently removed as trustee. If you answer “yes” to any of these questions, it is crucial you consult with a trust litigation attorney to go over your options for suspending, removing or surcharging a trustee.
If you suspect an elderly trustor has been subjected to elder abuse that resulted in damage to the trust, it might be possible for you to bring a claim against the person you believe to be the perpetrator. A trust litigation attorney can provide guidance on the type of financial exploitation claim to bring. Consider the examples below.
A decedent’s children, surviving spouse or cohabitating partner may be entitled to an inheritance, even if they have been left out of a decedent’s trust. We provide an overview of inheritance rights as they pertain to children, spouses and unmarried cohabitating partners below.
There are typically a handful of players when it comes to trust litigation. Our trust attorneys can help enforce any of these groups’ rights and streamline the legal procedures that arise.
Trustees may choose to involve themselves in trust litigation only when they are defending their actions as trustees, defending the trust or bringing a claim on behalf of the trust against a beneficiary or third party. Trust attorneys can counsel trustees about how to proceed in trust disputes.
Beneficiaries are the ones who stand to inherit from trusts. In trust disputes, they can either bring claims against other beneficiaries, trustees or third parties or defend claims brought against them. Trust lawyers can litigate on behalf of beneficiaries to help them obtain or keep the inheritance to which they’re entitled.
Heirs of decedents, such as children, may have a right to inherit from a trust even if they are not named as beneficiaries. Trust attorneys can help heirs enforce their rights.
If you find yourself embroiled in a trust dispute, the qualified trust lawyers at Keystone Law Group have the expertise and resources to help you effectively navigate any trust litigation matter. Contact us to learn more about our trust services.
Keystone represented a client in her 70s who was the settlor of an irrevocable trust that she unknowingly signed while overly medicated by her son, who had inserted himself as the trustee. Using his position as trustee, the son took out a hard money loan against the house owned by the trust and also maxed out her credit cards.
After learning the full extent of the son’s misconduct, Keystone petitioned the court, outlining the egregious acts of financial elder abuse by the son against our client. The presentation of the countless ways he misappropriated his mother’s resources shocked the judge’s conscience so much that during the initial hearing, he immediately granted Keystone’s petition to suspend the son as trustee of the trust and replaced him with a private professional fiduciary. Through continued intense pressure and litigation, by the second hearing, Keystone obtained an order invalidating the trust on account of the trust having been created through unlawful means.
Keystone’s client recouped her assets, which consisted of her life savings, and regained the ability to support herself financially for her lifetime.
In a case involving some of the biggest law firms in the world, Keystone successfully represented a grandchild in an action to interpret a series of irrevocable trusts in a manner that would disqualify Keystone’s client from receiving any distribution.
In 1980, prior to having any grandchildren, the client’s grandfather created six (6) separate irrevocable trusts that were, by and large, identical to one another. Each trust named one future grandchild (i.e., “my first-born grandchild,” “my second-born grandchild,” etc.) as its beneficiary. Keystone’s client was the first-born grandchild; however, the client was born out of wedlock and never lived with her father, the grandfather’s son.
The trustee of the grandfather’s trusts, with the grandfather’s support, filed a petition to exclude Keystone’s client as a beneficiary on the basis that the term “grandchild” should not include a grandchild born out of wedlock who did not live with the grandfather’s child during their minority.
At an early hearing, and without requiring a trial, the court ruled in Keystone’s client’s favor. The court agreed with Keystone that the trusts were clear and unambiguous on their face and that the term “grandchild” means what it says and could not be reasonably interpreted to exclude a biological grandchild, regardless of the grandchild’s parents’ decision not to marry or live together.
“Verlan managed to accomplish what so many probate attorneys had told me could not be done. I was a victim of elderly financial abuse by my own son. He had placed all the assets I’d worked hard for all my life into an irrevocable trust and named himself as the trustee. My notarized signature was on the document, and my signing it was witnessed by an attorney. My son, who I’d put through medical school, was about to spend my entire life savings and sell my house. I had given him the legal authority to do so. He was challenging my ability to think for myself and retain legal counsel. He was playing dirty. I was lucky to have Verlan on my side. She really fought for me and eventually got the judge to void the document. Believe me when I say there is not a case Verlan can’t win.”
“As I began to manage my sister’s and her husband’s Living Trust, I knew I would need a qualified firm with the proper Trust and Probate credentials. After vetting SoCal firms (I live in NorCal), Keystone was my top finalist. They handled a tough situation, marshaled it through the Courts and beneficiary negotiations and, most important, protected me against liability. At all times, I was kept apprised of what was going on, and I was always afforded an opportunity to comment on draft documents. Look no further. This is the firm you want.”
“I am very appreciative of the service Keystone Law Group has provided me with. From start to finish of my already challenging trust situation, they have provided me with nothing but great service. I appreciate a law firm that is attentive and upfront with communication. Thank you for all of your help. I am glad that this is all over.”
“Considering probate and Will/Trust disputes make an already difficult situation, with a loved one passing, even more difficult, the attorneys and staff at Keystone Law did a lot to help me successfully navigate and manage the trust that I was overseeing. They were very knowledgeable and professional every step of the way.”
From the beginning, Hila displayed the skill needed to get caught up on what had transpired in the case already and the ability to listen to us carefully to grasp our feelings and understanding of the case.
There were particular hurdles to get over throughout the case, posed mostly by opposing counsels lack of urgency and failure to respond accurately to counsels requests. This is where Hila really took control of the situation. Her persistent communique with opposing counsel added just enough pressure to make things start to happen. She is obviously very competent in her knowledge of the law and our confidence in her grew as the case proceeded. Her ability to get opposing counsel to respond accurately within given time frames was impressive to us as we had dealt with him many times prior to employing your firm to handle it for us. It was very reassuring to know we had Hila in our corner and getting things done. We would also like to thank Joshua Taylor for his effective overseeing of our case. Your choice to pick Hila for the case was, in our eyes, a great decision.
Overall, we are very pleased with your representation of us in settling this trust. And, our hats are off to Hila for her exemplary advice, attention and communication in reaching a settlement.
Keystone Law Group’s mastery of probate law is unmatched. Our expert handling of complex trust matters stems from probate being our singular focus. We proudly serve the state of California and work overtime to assist clients nationwide with trust services and more. Learn more about Keystone Law Group below.
Our trust attorneys specialize in trust litigation. Regardless of whether it is interpreting a trust document, managing trust assets, providing disbursements to beneficiaries or bringing a trust contest, our trust dispute attorneys can help simplify the trust litigation process. Noteworthy accomplishments by members of our team include:
Our lawyers specialize in trust litigation in California. We’ve worked with clients in:
If your county isn’t listed above but you’re in California, reach out to us to see if our trust lawyers may still be able to serve you.
While every trust dispute is unique, clients in need of trust services have many of the same questions. You will find Keystone’s responses to the most common trust litigation questions below.
There is no simple answer to this question, as many factors could play into the cost. Those factors include:
Don’t let worries about cost stop you from consulting with a trust litigation lawyer. As part of an initial consultation, a trust lawyer can review your options with you and help you choose a path that aligns with your budget.
Schedule a free consultation with one of our trust attorneys who can provide you with a cost estimate after learning more about your case.
Yes, a minor can be a beneficiary of a trust, although it is important to keep in mind that they will not have direct access to their inheritance until age 18 or later, based on the terms of the trust.
Yes, trustees are often beneficiaries. Trustees who fall under this category have to make sure not to put their interests above those of other beneficiaries, as trustees owe fiduciary duties to all of the trust’s beneficiaries and have a legal obligation to remain impartial. If they do put their personal interests above the interests of the other beneficiaries, they risk legal retaliation.
Determining whether to get involved in a trust dispute as a trustee is a complicated matter, so you should consult with a trust lawyer regarding your individual case. If the terms of the trust instruct the trustee to get involved, the trustee may have a legal obligation to do so. If the trust does not provide any directives, unless the assets of the trust are at stake, it may not be in the trustee’s best interests to get involved.
For example, if beneficiaries are arguing among themselves about their allocated shares of the trust, it may be advisable for trustees to abstain from participating in the dispute. However, if a beneficiary is seeking to invalidate the trust as a whole, or if it comes to light that the trustor was subjected to elder abuse at the time they created or executed the trust, it may be crucial for the trustee to become involved.
The trust administration process will differ depending on the terms of the trust and the nature of the property held in trust, among other factors. In general, however, trust administration involves the following basic tasks:
Read more about trust administration.
Yes, but the resignation process can get complicated, so it is recommended you have a trust attorney to help you through it.
First, you must thoroughly examine the trust instrument to determine the procedure for resigning and see whether a successor trustee has been named. If one hasn’t, and the trust does not provide a procedure for appointing a successor trustee, you may need to appoint a new trustee and obtain court approval to allow for your resignation.
In order to make the transition more seamless, you will need to prepare a final accounting to provide to the beneficiaries and new trustee.
It is common for decedents to die with both a will and a trust, since together they present a comprehensive estate plan. Problems can arise when the two documents contradict each other.
In this scenario, it’s likely some of the decedent’s assets will be distributed according to the terms of the trust and some will be distributed according to the terms of the will. A trust attorney can help determine the exact manner in which the assets will transfer and litigate on your behalf if it becomes necessary to do so.
The answer to this question depends on many factors, including the complexity of the trust and whether the trust is subject to any disputes or litigation. If the trust is subject to disputes or litigation, it can be years before the dispute is resolved and the trustee can make any distributions. Otherwise, the process typically takes between 12 and 18 months.
It should be noted that because of trustees’ fiduciary duties to beneficiaries, they must attempt to make the process as quick as possible. In other words, they should complete their duties in a timely manner.
It depends. Trustees should only distribute trust assets to beneficiaries whose shares will not be affected by the outcome of the trust dispute. In all other cases, trust assets should not be distributed until every dispute is resolved; otherwise, the trustee risks personal liability for improper distributions.
Yes, trustees generally have the power to override beneficiaries in making decisions about the trust – although trustees are required to keep beneficiaries reasonably informed about the decisions they make, so if they violate any of their fiduciary duties to the beneficiaries, the beneficiaries can hold the trustee personally liable for any damage caused to the trust.
The trustees have an obligation to comply with the terms of the trust. At times, trustees are given the right to use their discretion when making disbursements. For instance, if a beneficiary has a substance abuse problem, the trustee may be given the power to elect to put that beneficiary’s disbursements on hold until the problem is resolved. Likewise, if the trustor had set aside trust funds for a child’s college education, but the child decides not to go to college, the trustee can withhold their disbursement until they reach a certain age.
Even if a trustee is given the right to withhold disbursements, it’s important to note that trustees cannot do so without having a valid reason.
Absolutely. If the beneficiaries suspect the trustee of having engaged in any misconduct (e.g., mismanaging trust assets) that resulted in damage to the trust, the trustee can not only be sued but removed and surcharged. Trustees may also be required to pay the beneficiaries’ attorney’s fees and costs.
Read more about beneficiary rights.
Trust amendments are utilized by trustors who wish to change the terms of their trust without going through the hassle of drafting an entirely new trust. To execute a trust amendment, the trustor must follow the rules and procedures set forth in the trust regarding revising the trust for the amendment to be considered valid.
It can be overwhelming to be trustee of a trust because of the sheer number of responsibilities and obligations that come with the role. If a trustee makes even one mistake, they are likely to suffer serious financial consequences.
The best way for trustees to safeguard themselves against financial mishaps is by hiring a trust lawyer to guide them through the steps of the trust administration process. Some of the most important steps of the process are covered below.
Trust accounting refers to the bookkeeping of trust accounts. It is crucial to the management of a trust, since trustees have a duty to keep a trust’s beneficiaries reasonably informed about the trust’s incoming and outgoing assets.
There are strict requirements about the manner in which trust accountings should be provided to trust beneficiaries.
A trust attorney can help trustees navigate these complexities so their trust accountings are not only accurate but also code-compliant. By taking this extra step of hiring legal counsel, trustees can ultimately save the trust time and money, as well as the headache of trust litigation.
If trustees provide beneficiaries trust accountings that are inaccurate or reveal malfeasance on the part of the trustee, it is their right to bring an action that challenges said accountings.
In these kinds of scenarios, it is advisable to hire a trust dispute lawyer in case further action needs to be taken against the trustee (i.e., the trustee needs to be suspended, removed or held liable for damages and/or attorney’s fees).
While the types of trust property disputes can vary greatly, they usually fall under one of the below categories:
If someone unlawfully takes a trustor’s assets while the trustor is alive, it does not mean they will be off the hook once the trustor dies.
Trustees can bring actions against trust beneficiaries or third parties, regardless of whether the trustor is alive or deceased. If there is reason to believe trust assets were taken improperly, it may be the trustee’s duty to litigate in order to recover the misappropriated assets. A trust lawyer can provide additional guidance to trustees about whether or not to involve themselves in a trust property dispute.
A party found to have wrongfully misappropriated trust assets can be held liable for all the damage they have caused to the trust, regardless of whether the claim is against a trustee, beneficiary or third party. In addition to damages, the defendant may also have to return lost assets and cover the opposing side’s trust litigation expenses.
If a property claim has been brought against you, you should immediately get in touch with a trust attorney to craft a defense strategy. Without the right representation, consequences can be extreme.
There are many reasons for bringing an 850 Petition, but in trust matters, they are filed to seek the transfer of real or personal property into or out of a decedent’s trust. Heggstad Petitions – a kind of 850 Petition – are frequently utilized in trust disputes. Below are some examples in which an 850 Petition may be filed.
Before a trust can be administered, all parties involved (i.e., the trustee and beneficiaries) should be in agreement about which trust documents are valid. If any don’t seem valid, a trust contest can be brought to invalidate the entire trust or problematic portions of it.
When dubious circumstances surround the creation or execution of a trust, anyone who has standing (i.e., the trustee, beneficiaries or heirs) can bring a contest to challenge the trust’s terms.
In trust contests, it is the trustee’s duty to do what is in the best interest of the trust and its beneficiaries. Trust dispute lawyers can provide further guidance about whether you meet any of the grounds for bringing a contest.
If you are the acting trustee of a trust, and another interested party brings a trust contest, you may be obligated to defend the validity of the trust document. Likewise, if you are a beneficiary of a trust that another interested party has challenged, it may be in your best interest to defend against the trust contest to preserve your financial stake in the trust.
Whether you are a trustee or beneficiary, a trust dispute attorney can help you determine whether it would be worth your time and energy to defend against a trust contest. If it is, the trust lawyer can help craft a litigation strategy tailored to your desired outcome.
Litigation can get costly, which is why many people use it as a last resort. If you have a trust dispute but are averse to litigating it, a trust attorney can work with the parties involved to help facilitate a settlement outside of court.
The probate code is complex so it is essential to have a trust lawyer in your corner to help avoid costly negotiating mistakes and to maximize your benefit under any settlement agreement.
Learn more about contesting a trust.
When a decedent has designated a “payable-on-death beneficiary” on certain assets, those assets will transfer automatically to the named beneficiaries when the owner of those assets dies. Just like trusts, a beneficiary designation can be contested.
Assets with beneficiary designations can include:
A trustee may be able to challenge a beneficiary designation if they believe that a “transfer-on-death” asset should be distributed as part of the trust. Likewise, beneficiaries can challenge a beneficiary designation if they believe a designated beneficiary change was obtained improperly. When bringing this kind of trust dispute, it is crucial for both parties to have an experienced trust attorney on their side
When an interested party challenges a payable-on-death beneficiary designation on an asset left to a trust, the trustee may be put in the position of having to defend the decedent’s beneficiary designation. Similarly, a named payable-on-death beneficiary may be forced to defend a decedent’s beneficiary designation if another person seeks to invalidate it.Whatever the situation, a trust lawyer can exponentially increase the odds of the court ruling in your favor.
Spouses and children may have a right to inherit trust assets because of their relationship to the deceased trustor, regardless of whether the spouse or child is named as a beneficiary of the decedent’s trust.
It may be more challenging for cohabitating unmarried partners to claim an inheritance since inheritance laws only deal with married couples. However, this does not mean they are not entitled to an inheritance.
Whether you are a spouse or a child looking to protect your interest in a trust, a trustee forced to litigate against a spouse or child concerning their inheritance rights, or a cohabitating partner seeking to enforce an inheritance agreement you made with the deceased, a qualified trust litigation attorney can help ensure a desirable outcome is reached.
A trust attorney can help spouses and children secure their inheritance rights, even if they are not named as beneficiaries of a trust.
California law includes protections for spouses and children who are inadvertently omitted as beneficiaries from a decedent’s trust. If the right circumstances apply, spouses and children may be entitled to a portion of the trust’s assets.
Community property refers to assets accumulated over the course of a marriage. As the name suggests, this kind of property belongs equally to both partners. When a spouse passes away, the deceased spouse’s trust can only dispose of his or her half of the community property.
Separate property applies to property acquired prior to marriage and sometimes to certain property acquired during marriage (e.g., property obtained by gift or inheritance and anything purchased using this property).
Problems can arise when a deceased spouse tries to dispose of their surviving spouse’s interest in community property as part of the deceased spouse’s estate or trust. A trust lawyer can help trustees and surviving spouses investigate whether a trust is violating the surviving spouse’s community property rights.
If the trust identifies a spouse as a beneficiary, but the couple got divorced after the trust was signed, the beneficiaries may have a right to challenge the divorced spouse’s right to inherit.
A skilled trust lawyer can take the wheel to ensure separate property is kept separate and divorced spouses are provided the disbursements to which they’re entitled.
The inheritance rights of unmarried couples in cohabitating partnerships can be somewhat ambiguous, given there are no provisions in the law to address this issue. Many couples make verbal or implied agreements about which assets will go to the surviving partner, but these types of agreements can be difficult to enforce in court. To avoid confusion and possible trust disputes, the best route of action for unmarried couples is to formalize inheritance agreements with a valid estate plan or other legally valid document.
If no formalized agreement had been in place when a partner in a cohabitating relationship dies, a trust attorney can help the surviving partner litigate to obtain the inheritance to which they believe they are entitled. Trust lawyers can also represent partners of decedents whose right to an inheritance is being challenged.