A trust is a type of fiduciary agreement in which one party holds legal ownership of property for the benefit of named individuals. A trust takes place when one individual, known as a trustor, grants legal control of their property and assets to another individual known as a trustee. Control over assets is granted to the trustee for the benefit of beneficiaries; however, within this legal agreement, certain disputes can arise. Today, Catanese and Wells trust lawyers in Los Angeles are known within California as one of the most experienced estate dispute attorneys in the state and have worked with clients on a number of trust dispute cases. As with any estate planning vehicle, disputes can arise from beneficiaries on the legality of the trust. Some of the most common reasons for trust litigation include:
Capacity Concerns
One of the most common causes of trust disputes is when a party questions the trust maker’s capacity to form the trust. In California, testamentary capacity requires a testator to fully understand the action they are taking, remember what property they own, and understand their relation to family members impacted by the trust. If a party can prove that the testator could not perform any of the actions mentioned above, their trust may be dissolved.
Disinheritance
When a child or loved one is notified of their disinheritance, they are often surprised and confused. Oftentimes, a beneficiary may not be aware that they have been legally disinherited from their relative’s estate before a trust goes into effect. This party may be concerned that the testator was unduly influenced into excluding them from their trust when this happens. Undue influence occurs when an individual can manipulate another person into making decisions that do not align with their own best long-term interests.
Trustee Breaching Fiduciary Duty
A trustee is a person who is tasked with managing the assets of a trust for the trust’s beneficiaries’ benefit. A trustee must handle assets in the way dictated by the trust’s terms to the best of their abilities. When a trustee fails to carry out their responsibilities successfully, it is referred to as a breach of fiduciary duty. Whether or not a trustee makes an honest mistake when carrying out the trust does not diminish the breach of their duty. There are many ways a trustee can breach their fiduciary duty, including making bad investments with the trust funds, neglecting to pay taxes, favoring one beneficiary over the other, or commingles estate funds with personal funds.