Is a trustee acting improperly? Do assets need to be recovered from a trust? Discuss your concerns with a probate litigation firm before it’s too late.
Suppose a decedent’s trust instructs for trust distributions to beneficiaries to be made every six months, but more than eight months have passed with no payments made. Can a trust be sued for a trustee’s failure to pay beneficiaries on time?
Or imagine the value of a trust has dropped significantly over the past year, and beneficiaries believe the loss stems from the trustee’s poor management of investments. If negligence caused the financial harm, can you sue a trust to hold the trustee accountable?
Suppose a trustee who is also a beneficiary tells their siblings that the trust isn’t yet ready to distribute, but they nevertheless withdraw their own share. Can a trust be sued for a trustee’s failure to treat all the trust beneficiaries equally?
In these examples of cases originating within the trust, the trust can typically be sued. However, even if the goal is to recover trust assets, the lawsuit must be filed against the trustee in their fiduciary capacity, not against the trust itself. If the court finds that the trustee’s misconduct or mismanagement caused losses, they may be ordered to reimburse the trust or pay a surcharge personally.
A trust can also be sued by outside parties, often when disputes involve the trust’s assets rather than the trustee’s actions. But again, these lawsuits must name the trustee as the respondent, since the trust itself cannot be sued.
For instance, suppose the decedent’s probate estate doesn’t have enough funds to cover outstanding debts, and creditors obtain a judgment for the balance. Can creditors go after a trust for repayment?
Or imagine you’re a family member with evidence that the decedent fraudulently transferred property you rightfully own into their trust before death. Can you sue the family trust to recover that property?
In both examples, a lawsuit may be filed against the trustee representing the trust. However, unlike internal trust disputes, the trustee typically won’t face personal liability in these “outside” cases, since the litigation concerns trust assets, not trustee misconduct.
We understand how confusing these distinctions can be, especially since rules and procedures vary depending on the nature of the case. This is why it’s important to consult an experienced probate litigation attorney as early as possible.
Many trust-related claims are subject to strict statutes of limitations, and delaying action can limit your ability to recover what you’re owed. A knowledgeable attorney can help you evaluate your options, preserve your rights, and take swift steps to protect your inheritance or recover mismanaged trust assets.
Seeking to contest a trust? Or perhaps you need help interpreting ambiguous language in a trust document? Although the trustee may defend the trust in these situations or even file claims on its behalf, such cases concern the validity or interpretation of the trust instrument itself, not the trustee’s conduct or the trust’s assets. For this reason, the phrase “suing a trust” generally doesn’t apply to these types of disputes.
