Trust Litigation: Failure to Make Proper & Timely Distributions

Get an Oakland Trust Litigation Lawyer on Your Side

A lawsuit that alleges a trustee failed to make proper and timely distributions under the provisions of a trust is a type of "breach of duty" litigation. Trustees have a duty to administer a trust in a fair manner consistent with the terms of the trust. If a trustee doesn't meet that obligation, beneficiaries can sue to have matters rectified or to get a trustee removed.

Trustees are entrusted with the financial authority which determines how trust assets are managed. It is their signature and decisions which make things happen, including paying creditors, taxes, and distributing money to beneficiaries. If they are not a professional, or if they are inexperienced in trust management, they may become overwhelmed.

While a trustee is given the power needed to administer the trust, there is a mechanism to remove them if they either can't handle the job or are mismanaging the affairs of a trust. Incompetence or simple neglect can all lead to the same result-beneficiaries are harmed financially.

It is always a good idea to enlist legal help from a lawyer when attempting to deal with trusts. I have been serving Alameda County for over 20 years as a seasoned trust attorney.

Schedule of Distributions

A trust will include a section laying out how distributions are to be made. When all assets are to be distributed in one final settlement, the trust functions much like a will, closing out the affairs of the deceased. When a trust endures, distributions will be calendared to fall on a regular schedule. How much is released will depend on the terms of the trust.

Some common ways to determine a schedule of distributions:

  • Based on trust accounting income - A flexible amount it paid out. The amount is some percentage of the income the trust receives. All or a portion of the income may be distributed to beneficiaries on an annual, quarterly or even monthly basis.
  • Fixed distribution - A set amount is delivered to beneficiaries on a regular schedule.
  • Discretionary distributions - These are made when a trustee deems them appropriate. If allowed to do so, a trustee may distribute funds to meet unexpected needs of a beneficiary.

Some trusts only allow distribution of income to the trust; others allow distribution of principle assets as well. As in all other cases, the wishes of the settlor come into play, as documented in the terms of the trust. So it's important to understand the trust distribution rules in your case.

If you are the beneficiary of a trust and feel the trustee is not making proper and timely distributions, you have other options besides immediately starting litigation. An attorney can advise you on whether negotiation is more appropriate and what other legal remedies may be available. If you are in need of a lawyer in Alameda County, I can examine and analyze the trust documents, see if there are any flaws and what grounds might be available to challenge the trust or force the trustee to keep to a proper distribution schedule with the correct amounts released.

Contact the Law Offices of Steven M. Simrin for a free consultation.

Contact the Law Office of Steven M. Simrin

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