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Trust Litigation and How to Choose a Trust Attorney
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Trust Litigation

What is Trust Litigation

Trust and business law language can be confusing. In most cases, disagreements about the rights to Trust agreements do happen. You will mostly see entities arguing over the legal matters regarding their privileges to a Trust with ambiguous terms in it. Sometimes it even takes a court to get the issue resolved.

State: Estate Litigation Attorney California
Practice Area: Trust Litigation

California Counties: Orange County, Los Angeles

Serving California Residents: Newport Beach, Huntington Beach, Irvine, Laguna Beach, Costa Mesa, Mission Viejo, Fountain Valley, San Juan Capistrano, Dana Point, Laguna Niguel, Yorba Linda, San Clemente, Laguna Hills, Coto De Caza, Tustin, Seal Beach, Westminster, Garden Grove, Santa Ana, Anaheim, Stanton, Rancho Santa Margarita, Rancho Mission Viejo, Placentia, Orange, Villa Park and surrounding cities.

Trust Litigation and protecting your legacy

HESS-VERDON – #1 ORANGE COUNTY TRUST & ESTATE LITIGATION LAW FIRM

If you have issues concerning a Trust, seek information, advice, or legal representation from a Trust litigation attorney. An experienced Trust litigation attorney will help analyze and make specific ownership elements in the contested Trust. Expert Trust litigation attorneys boast of experience in addressing many different legal matrices and unique loopholes. 

What is a Trust? 

A Trust is an agreement where one party holds the other’s property’s legal title for a third party’s advantage. It is a three-party fiduciary relationship involving: 

  • The ‘grantor’ is the person who creates the Trust and transfers the title of his/her property to the Trustee. 
  • The ‘Trustee’ is the person or entity that receives the legal titles and manages and administers the Trust.
  • The beneficiaries are the people who benefit from the property in Trust. It can be anyone, from the grantor, his/her dependents, and even the Trustee.

Types of Trust funds

There are many types of trust funds, including Credit Shelter Trust Generation-Skipping Trust, Qualified Personal Residence Trust, Insurance Trust, separate Share Trust, and Charitable Trust. These can be categorized as revocable or irrevocable, funded or unfunded, Living or Testamentary.

In a revocable trust, the grantor has control over the assets and can change the Trust anytime. On the other hand, an irrevocable trust can’t be changed once created. A funded trust receives funding from the grantor, while an unfunded trust is just made up of the agreement; funds can start coming after the grantor’s death. A living trust provides for the grantor until they die, after which it goes to his/her beneficiaries.

Reasons why people create Trusts

There are many different motives why people use Trusts. They are used to provide the grantor’s assets with legal protection, making sure they are shared according to his/her wishes. Trusts help save time, avoid probate, reduce paperwork, and avoid or pay less estate tax. A Trust can also be used to maintain privacy by buying a property through a Trust so that your name won’t appear in the property’s public records.

But as already mentioned, a Trust agreement is not always straightforward. When the grantor creates the Trust, they sign a document called the Trust deed stating the transfer of legal titles, the beneficiaries, and the property in Trust.

 Depending on the Trust’s wording, contentions are likely to arise when one or more parties feel the Trust can be interpreted differently. Sometimes, parties involved in the Trust can solve their issues outside of the court; other times, it takes a court’s ruling to resolve disputes involving Trusts.

What is Trust litigation?

Trust litigation is contesting or defending a Trust in court. While Trusts are created to avoid probate, it does not stop the grantor’s children from bringing legal action against the Trustee in court to get the Trust set aside for various reasons or compel the Trustee to pay for breaching fiduciary duties.

One example of a Trust litigation situation is when a child beneficiary comes of age and discovers that an uncle who became their Trustee, early on when their parent died, took money from the Trust for his own use, didn’t charge interest, and wasn’t financially sound. No matter when this inappropriate borrowing happened, the child could take the uncle to court for breaching his fiduciary duty.

With more and more Californians using Trusts for various reasons, trust litigation cases are on the rise. Most people lack enough experience as either beneficiaries or Trustees, and often, errors are made, leading to litigation. And unlike other litigation bound by the statute of limitation, Trust litigation can happen anytime, even after the party being sued is long dead.

Common Trust litigation scenarios include:

  • Lack of capacity or Undue Influence or tortious interference with a testamentary expectancy when beneficiaries contest recent amendments in a Trust.
  • Accounting, especially when beneficiaries feel deprived of complete or accurate information concerning assets in Trust.
  • Trustee’s duty: When a Trustee is sued for self-dealing and breaching their fiduciary duty to beneficiaries; for example, unless the Trust deed says that you can sell a property in your Trust, selling it will be a violation of your fiduciary responsibility to beneficiaries.
  • Court Approval: when a trustee petitions the court to help with instructions on carrying out a particular transaction.

How is California Trust Litigation carried out?

Depending on the terms of the Trust agreement, most disagreements find their way in the court of law, with beneficiaries seeking to get the Trust set aside, the Trustee removed, account for all funds spent, and pay for damages. Some Trusts documents state how disputes are to be resolved.

The Trustee re-joins in the court, and because they’re personally liable to beneficiaries, they have to defend personally. After discovery, a trial can proceed. Trust litigation can take many years, cost a lot of money, and during the duration, the suing beneficiaries can attempt to get the Trust under a temporary fiduciary until the case is determined.

In most cases, the Trustee will ask the Trust to pay for defense expenses. Beneficiaries will often object, but most courts allow but with the condition that the Trustee pays back the money if they’re found in the wrong. Of course, the basic guidelines of evidence apply like in other court cases. Usually, one has no right to a jury, but exemptions can be made. 

Most trust litigation cases are basically family fights involving deep emotions and misgivings rather than substantial evidence of wrongdoing. Always think twice before getting into trust litigation.

In case you need help concerning Trust issues, we can provide support. We are California-based trust litigation attorneys with experience representing both trustees and beneficiaries. Contact us today to talk over the concerns you have about your Trust and find out how we can help.

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Ultimate Guide: What Is Trust Litigation And What To Know!

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Client Since 1994

Ultimate Guide: What Is Trust Litigation And What To Know!

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Client Since 2006

Ultimate Guide: What Is Trust Litigation And What To Know!

“Definitely a firm that will “fight to the finish.”

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Client Since 2010