Trust Disputes & Litigation

Oakland Lawyer Representing Your Wishes

While trusts are often established with a goal of minimizing the possibility of legal disputes, such disputes do nonetheless sometimes occur. As a trust attorney who has been serving Oakland and the rest of Alameda County for over 20 years, I have seen this happen all too often. Some reasons for disputes are briefly discussed below.

This is meant to be a general overview of common areas of trust litigation. Each case is unique and a qualified trust litigation attorney should be consulted to determine the merits of any proposed legal action.

Trustee Problems

Acting as a trustee entails several duties, any of which can be the basis for litigation.

  • Administration duties require a trustee to understand the terms of the trust and manage the assets in accordance with those terms. Subtasks are generated by this duty, such as having a true and accurate accounting of assets, filing taxes, collecting and protecting trust property, and others.
  • The duty to act personally means a trustee shouldn't delegate tasks that require the expertise they possess. In other words, there is a reason someone is named trustee, a reason that reflects something about them personally. It may be a skill or training or familiarity with some included task, like investing. When delegation is appropriate, the trustee still has a duty to oversee the results.
  • Duty to identify and keep separate trust property. Assets in a trust are meant to be managed separately from the trustee's own assets and identified as belonging to the trust. "Comingling" is the act of merging funds inappropriately.
  • Keeping records and reporting is a related duty which provides transparency to beneficiaries and others authorized to receive such information.
  • Duty to provide information to beneficiaries is another responsibility centered on communication. Trustees must inform beneficiaries of any material fact which impacts the trust. The purpose of this is to allow beneficiaries a chance to monitor what is happening with trust assets.
  • Duty of loyalty means that a trustee should always act in a manner that keeps the best interests of the beneficiaries in mind. Some common types of breach of duty litigation would include: Failure to make proper and timely distributions.
  • Duty of prudence refers to acting with reasonable care and caution when administering the trust. The idea is to avoid risky investments or a trustee that acts outside the scope of his or her knowledge.
  • Duty to be impartial reflects the situation when there are multiple beneficiaries of a trust - the trustee has to treat all equally. This also includes acting toward the interests of future beneficiaries.

Any or all of these duties can form the basis for legal action by a beneficiary to remove a trustee, seek restitution from a trustee, or challenge particular decisions made by the trustee. These actions are lumped under the general term, "breach of duty." Another area where disputes arise is not against the management of the trust or the trustee, but the trust document itself. Sometimes provisions of a trust document are ambiguous and can only be resolved through litigation. Other times the validity of the document is challenged, as when an affected party alleges the settlor signed the document under duress or without the mental capacity to understand the implications of the trust.

Representing the Trustee

Litigation may arise on the trustee side of issues as well. Even appropriate actions may be viewed by beneficiaries as unfair or as mismanagement by the trustee. When a trustee's actions are challenged, an aggressive defense is warranted against accusations of breach of duty. Legal representation can help avoid personal or professional liability and your attorney will also be able to negotiate on your behalf when going to court is not the best solution.

In other cases, a trustee may need representation to obtain assets rightfully belonging to a trust that are being held by third parties. Assets may be hidden or simply denied, making investigation, evaluation and, if needed, a court's intervention.

To get the trained eye of an Oakland trust attorney from the Law Offices of Steven M. Simrin, call (510) 328-4005 today.

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