The distribution and management of family trusts are tricky. A beneficiary is owed a duty by the Trustee to marshal and account for all trust assets. A beneficiary is also entitled to receive all distributions specified in the trust.
Sometimes it seems like a Trustee is withholding a distribution from a sibling to get even for a childhood dispute like stealing a toy or not being invited to the circus. When that happens, the Trustee is clearly breaching their fiduciary duty. But how does a beneficiary enforce their rights?
The main obstacle for beneficiaries is the cost to enforce their rights. When a letter from an attorney doesn’t motivate a trustee to perform their duties, a beneficiary is forced to file a Petition in the Probate Court. The matter then proceeds like any other civil litigation matter, with parties completing written discovery, taking depositions, writing motions, attending hearings, and ultimately having a trial.
A trustee can use trust funds to defend themselves, although they may have to repay it if they are found to have breached their duty. But a beneficiary must pay their attorney themselves. Trust litigation is generally not the type of case that can be taken on contingency.
If a beneficiary is victorious at trial it is likely that the Court will order a Trustee to pay the beneficiary’s attorney’s fees. That benefit makes it absolutely worth while for a beneficiary to pursue their rights.
The attorneys at Cottle Keen Lopiccolo & Heyde have obtained favorable awards and settlements for trust beneficiaries. Call our office to learn how we can help you.
