Common Causes of Trust Litigation That You Should Be Aware Of

September 13, 2024
Luis E. Barreto

 

 

 

 

 

 

 

 

 

 

A trust is a powerful tool for securing assets and wealth for generations to come within your Florida estate plan. Challenges lie, however, in protecting your vision and upholding the integrity of your trust and the assets held within it. Litigation often arises from the same common issues that befell other trusts before yours and will continue to take down trusts for those who aren’t diligent.

Trust litigation can be challenging, especially when it involves sensitive topics and fractured relationships among loved ones. Knowing the common causes of trust litigation can help you identify potential issues early on, allowing you to address them proactively or prepare for the possibility of litigation.

Issues in Drafting the Trust

One of the most frequent causes of trust litigation relates to problems during the actual drafting of the trust. If there are doubts about whether the settlor fully understood or is capable of understanding the implications of their decisions, the trust’s validity could be questioned.

Additionally, there may be concerns that the trust was established under undue influence, where someone else pressured or manipulated the settlor into making decisions that did not genuinely reflect their wishes. Although a trust may appear valid at first glance, underlying issues such as these can lead to challenges in court and potentially result in the trust being invalidated.

Trustee Self-Dealing or Acting in One’s Self-Interest

Being a trustee is often a thankless job, unless of course trustees are being paid for carrying out their duties. In many cases, trustees receive an actual paycheck or are guaranteed a payout when the estate is executed for fulfilling their role. Trustees don’t have to be loved ones—they can also be professionals whose job it is to uphold their duties to the trusts they serve.

Regardless of who is serving as a trustee, they are required by law to act in the interest of the trust and make decisions that exclusively benefit the trust. Self-dealing by taking cash or other assets, even with the plan to “return” them someday, is a breach of the fiduciary duties of a trustee. This can result in expensive litigation, but in some cases, the damage is done. It’s important to make sure the trustees of a trust understand and uphold their duties at all times.

Improper Execution of the Trust

Trust disputes occur when disagreements arise regarding the administration or validity of a trust. Often, heirs or beneficiaries who are dissatisfied with the terms of a trust may seek to challenge them, hoping to have the trust overturned or altered. These disputes can emerge from various grievances, whether it’s dissatisfaction with how the assets are being managed, perceived unfairness in the distribution, or even suspicions of foul play in the trust’s creation.

Unchecked trust disputes can spiral into significant problems for both trustees and beneficiaries. Financial losses are a common consequence, as legal battles drain the trust’s resources. Beyond the financial impact, these disputes can shatter relationships among family members, sometimes irreparably. The emotional toll of a trust dispute can linger long after the legal issues are resolved, leaving lasting scars on all parties involved. To avoid such outcomes, it is essential to address any concerns about the trust’s administration promptly and to seek legal guidance when necessary.

Trust the Experienced Trust Litigation Attorneys at Luis E. Barreto and Associates

For nearly three decades, Luis E. Barreto and Associates have been dedicated to protecting the people of Florida through effective estate planning and trust litigation. When trust litigation arises, you need a reliable legal team by your side. Contact Luis E. Barreto and Associates today to discuss your case and protect your interests and the interests of your beneficiaries and heirs.

Luis E. Barreto
Latest posts by Luis E. Barreto (see all)