Estate Administrations doesn’t always go as smoothly as planned. Trustees and executors often have to contend with greedy grandchildren, squabbling siblings, snubbed spouses, and other untrustworthy trustees. Societal trends such as blended families, adult children living at home, and an aging population with increasing health issues such as dementia and stroke, add to the difficulties. Finally, there is the tension between wanting to honor a person’s wishes or cultural values which may conflict with the fiduciary duties of the trustee or executor.
The person in charge of administration of the estate can face legal attacks on the will or trust. Beneficiaries may seek to undo a document to get a better inheritance. This is done by filing a suit based on theories that the person did not have capacity to dispose of their estate at the time the document was created. Another alternative for challenging the trust (or will) is to claim that the Trustor or Testator was under undue influence (pressure brought to bear directly on the testamentary act, sufficient to overcome the testator’s free will and amounting to coercion that destroys the testator’s free agency.)
A Trustee also owes a fiduciary duty to all beneficiaries. A fiduciary duty imposes on the trustee a duty to act with the utmost good faith in the best interests of all beneficiaries. Beneficiaries can seek to remove trustees for numerous reasons. These reasons include the failure to act loyal to the trust (i.e solely in the interest of the beneficiaries), to avoid conflicts of interest with the trust or take part in a transaction that is adverse to the beneficiaries, to preserve, use and dispose of trust property, to not commingle their own property or funds with the trust, to not delegate their duties as trustee, and by failing to prudently invest trust assets. If found to be in breach, the court will compel the trustee to redress a breach of trust by payment of money or otherwise.
Trustees and executors are empowered, usually by the document, but certainly under the probate codes to retain counsel. The best way to avoid the potential lawsuit filed by the cast of characters listed above is to seek counsel early and often.