A beneficiary does have the ability to sue a trustee if they are mishandling the trust. If a trustee is not abiding by the will of the trust, they are mishandling trust assets, or they are not fulfilling their fiduciary duty, legal action could be a viable option.
Think a trustee is in breach of their duty? Read about what you can do to sue or remove the trustee.
What Happens If the Trustee Does Not Follow Rules Of the Trust?
Trustees are appointed to oversee that the intent of the trust is cared out. They are legally bound to the document and must follow the instructions outlines for them in the trust.
Can a beneficiary sue a trustee if a trustee does not follow one or more of the rules specifically written in the trust? Yes, they could be liable to be sued. What’s more, if they mismanage trust assets, they could be personally liable to repay them out of pocket.
Potentially Legitimate Reasons to Sue a Trustee
One of the most common reasons to sue a trustee is a breach of fiduciary duty. To do so, you’ll need to prove to the court that the trustee did not meet their financial obligations to manage and distribute trust funds. Breach of fiduciary duty usually involves one or more of the following circumstances.
- The trustee refuses to provide the beneficiaries with an accounting of the trust’s assets
- The trustee is putting their own interests above the trust and its beneficiaries
- The trustee mishandled trust assets
- The trustee is not communicating or fulfilling trust beneficiaries’ requests for information
If the trustee has committed any of these infractions they could be open to a lawsuit. Consult an attorney if this is the case for your trustee. You could have a case to remove the trustee or replace mismanaged funds.
Potentially Illegitimate Reasons to Sue a Trustee
There are many valid reasons to sue a trustee, but there are also situations in which the trust beneficiary does not have grounds for a lawsuit.
If you were disinherited by the settler of the trust or left less inheritance than other beneficiaries, you might not have a legal case. Any action taken by the creator of the trust without undue influence is legally binding. Even if you feel this is unfair, you might not have any legal grounds to sue the trustee in this situation.
Another example of such a situation is a trustee who takes a reasonable trustee fee. Maintaining a trust is a lot of work, from distributing assets, to investing trust funds, and paying taxes. Trustees are entitled to take a reasonable fee for the effort it takes to manage the trust.
Beneficiary Suing the Trustee of a Trust
To sue the trustee of a trust you’ll need to find legal representation. The process for each case might be different depending on the specifics of the trust and the infraction committed by the trustee.
Beneficiaries suing the trustee could provide the following benefits.
- Remove or replace the trustee
- Prompt the distribution of assets you’re entitled to by the trust
- Recover misappropriated trust funds
- Obtain accounting and trust information that has been withheld
- Obtain an interpretation of an ambiguous trust
If you suspect a trustee has broken the terms of the trust or is in breach of their fiduciary duty, contact a trust litigation attorney right away. Seeking council sooner could help you protect your beneficiary rights and prevent any further loss of funds from mishandling. Your attorney can also help you to collect any evidence of trustee misconduct for your case.
Get a Free Consultation
Think you have grounds to sue a trustee? Trust litigation can be complicated. You’ll want an experienced attorney to help you make a case. Call The Legacy Lawyers at 800-840-1998 to get a free consultation.