The Trouble With Trustees

The November 22-23 weekend investor section of The Wall Street Journal includes  an article entitled “The Trouble with Trustees,” which is a lengthy article discussing how both trustees and beneficiaries of a trust can manage the delicate relationship that can be strained when they clash over how to invest and/or spend the trust’s money.

A Trust is established by one person for the benefit of another person(s), but rather than giving the money outright to the beneficiary, the person creating the trust asks a third party (the trustee) to hold the money or property for the benefit of the beneficiary(ies).  The trust’s creator has considerable flexibility in controlling the terms of the trust and how the trustee should manage, invest, and/or distribute the Trust’s assets and income.

Not surprisingly, the Trust’s beneficiaries can often disagree with the trustee’s decisions.  For instance, when the beneficiary asks the trustee for a new Porsche but the trustee decides that a more economical Honda should suffice, a clash may occur between the beneficiary and the trustee over which car should be purchased.

Ford + Bergner has represented countless clients in disputes over trusts.  Below is a sample of the types of disagreements that arise between trustees and beneficiaries:

1.    Disagreement over the trustee’s accounting for the assets and income.

2.    Disagreement over the way that the trustee has invested the trust’s assets.

3.    Disagreement over how the income is divided between the multiple beneficiaries of the Trust.

4.    Disagreement over how much of the income/assets should be distributed in a particular year.

The Wall Street Journal article encourages trust beneficiaries to regularly review the accounting provided by the trustees.  It also suggests that the beneficiaries should regularly stay in contact with the trustee and keep notes from those conversations.  For trustees, maintaining accurate and complete financial records is important, and the prudent trustee should always treat the trust beneficiaries with respect, regardless of the request.

If you are either the trustee or the beneficiary of a trust and find that you are in a dispute over the Trust, the attorneys at Ford + Bergner will be happy to assist you.

Trust Litigation for Undue Influence: Dealing with Coersion of Kids on a Parent

Trust litigation can be a challenging process when it involves family members attempting to gain a trust without consent of others in the family. This can be a scenario that’s devastating to you if you have a sibling who’s done this without letting you know as means of gaining access to a parent’s assets. It’s a situation we’ve seen many times with our clients at Ford + Bergner LLP, and we can help you through similar situations.

But different scenarios might arise when this happens that could create complex legal territory to tread on. It’s why you should always handle trust litigation through an experienced lawyer who has years of experience dealing with estate issues like guardianship, probate, or trusts.

What Are Typical Scenarios in Undue Influence?

Most typically, it’s a brother, sister, or other relative who happens to be taking care of an aging parent who convinces the parent to execute a trust. They may convince the parent that they deserve complete control of all assets since they’re putting in full-time as a personal caretaker. This may not necessarily be done willfully by the parent if it’s common knowledge that the parent is suffering from senility.

In this scenario, there could be some kind of threat by the sibling against the parent if they don’t start the trust. We’ve seen cases where this is proven, and it’s never pleasant. However, the parent might have done it so they could continue to have the sibling care for them. In those threat instances, the sibling might threaten to walk away as caregiver if the parent doesn’t start a trust in their name.

Proving these cases requires considerable evidence and legal preparation by us. We’ll help determine if that trust in question can be challenged under a specific category. While undue influence is one, we can also challenge a trust based on fraud, ones created while under duress, or based squarely on the parent not being mentally fit.

Contact us at Ford + Bergner LLP so we can help you if you think a trust started by a sibling should be challenged due to undue influence. We’ll help you step by step through the process by acquiring the proper evidence so you have a strong case.