Trustees tasked with trust administration have a fiduciary duty. They need to follow the instructions included in the trust and make decisions that are in the best interests of the beneficiaries of the trust.
Many times, trustees have to make decisions about how to manage trust resources and when their liquidation might be necessary. In some cases, the beneficiaries of a trust may take issue with a trustee’s management of resources.
They could initiate probate litigation in scenarios where they question the decisions made by the trustee. Improper asset management could lead to attempts to remove a trustee from their position.
Incompetence and greed can lead to lawsuits
Beneficiaries may need to take legal action when they believe that the actions of a trustee could diminish the value of the trust. For example, the trustee might attempt to sell assets for less than their fair market value.
Beneficiaries might then need to take legal action to halt the sale of certain resources. The courts could issue an injunction preventing a transaction that may reduce the value of the trust. In scenarios where people suspect attempts at embezzlement or self-dealing, the courts may agree to remove the trustee.
Even incompetence regarding resources such as investment funds, real property and businesses could warrant litigation to remove and replace a trustee. Trustees may need support to ensure that the decisions they make are in the best interests of beneficiaries and in alignment with trust instructions. Beneficiaries may need help determining if the situation is legally actionable.
Probate litigation is sometimes necessary to resolve disputes about the management of trust resources. Reviewing trust documents and documenting conduct can both be important steps when preparing to address trust issues in probate court.