Trust & Estate Litigation: Common Disputes in Trusts and How to Handle Them
Trusts are often created as part of estate planning to protect assets and provide for loved ones after a person's death. While these legal tools can help manage and distribute wealth efficiently, they can also be a source of conflict among family members or beneficiaries.
Trust and estate litigation arises when disagreements over the terms of a trust, its administration, or the distribution of assets lead to legal disputes. Serving New York, New York, Goldstein Mauer PLLC is here to help. As estate lawyers, we often help our clients understand common trust disputes and how to handle them effectively.
What Is Trust and Estate Litigation?
Trust and estate litigation refers to legal disputes that arise over the validity, interpretation, or administration of a trust or estate. These disputes can involve various parties, including family members, beneficiaries, trustees, and executors.
While some of these disagreements can be resolved through negotiation or mediation, others may require formal legal proceedings in court. Estate lawyers play a crucial role in helping clients address these disputes by providing legal counsel, advocating for their interests, and working to resolve conflicts in a timely and fair manner.
Trust and estate litigation can be emotionally charged, as it often involves family dynamics and personal relationships. Because of this, handling these disputes with care and consideration is key to minimizing stress and preserving relationships where possible.
Common Types of Trust and Estate Disputes
Several types of disputes can arise in the context of trusts and estates. Below are some of the most common ones we encounter in our practice as estate lawyers:
Disputes Over the Validity of the Trust
One of the most common disputes in trust and estate litigation involves challenges to the validity of the trust itself. Beneficiaries or family members may contest the trust on various grounds, including claims of undue influence, fraud, lack of mental capacity, or improper execution.
Undue influence: If someone believes that the person who created the trust (the grantor) was coerced or manipulated into creating the trust or changing its terms, they may challenge the trust’s validity. This can be particularly common in cases where an elderly person changes the terms of their trust shortly before their death.
Fraud: A trust may be contested if it’s believed that the grantor was deceived or misled into creating the trust, especially if fraudulent representations were made.
Lack of mental capacity: If it’s believed that the grantor lacked the mental capacity to create or amend the trust, family members or beneficiaries may challenge the trust. This can occur if the grantor suffered from dementia, mental illness, or was otherwise incapable of understanding the nature of their decisions.
Improper execution: Trusts must meet certain legal requirements, including being signed and witnessed properly. If the trust wasn’t executed according to the law, it may be invalid.
As estate lawyers, we work to assess the strength of the validity challenges and determine the best course of action for our clients, whether it involves defending the trust’s validity or helping clients contest it if there are legitimate concerns.
Disputes Over Trust Interpretation
Disagreements can arise if the terms of the trust are unclear, ambiguous, or subject to different interpretations. In these cases, beneficiaries or trustees may disagree on how the assets should be distributed or what the grantor’s intentions were. Trusts must be carefully drafted to avoid ambiguities.
When trust disputes arise over interpretation, we work with clients to analyze the terms of the trust, review the grantor’s intent (often through testimony or documents), and determine the most appropriate way to resolve the disagreement. In some cases, it may be necessary to seek a court’s interpretation of the trust.
Trustee Misconduct or Breach of Fiduciary Duty
Trustees are entrusted with managing the assets of the trust according to the terms outlined by the grantor. They have a fiduciary duty to act in the best interest of the beneficiaries, which means they must be transparent, impartial, and avoid conflicts of interest.
Disputes can arise if beneficiaries believe the trustee has mismanaged the trust, failed to distribute assets properly, or acted in bad faith. Some common examples of trustee misconduct include:
Failure to act in the best interest of beneficiaries: If a trustee is found to be acting for their own benefit rather than the benefit of the beneficiaries, it can lead to claims of a breach of fiduciary duty.
Improper distribution of assets: Trustees are responsible for distributing assets according to the terms of the trust. If they fail to do so, or if they delay distribution without justification, beneficiaries may file a complaint.
Mismanagement of trust assets: A trustee who mishandles trust funds, makes poor investment decisions, or neglects to pay bills or taxes could be subject to legal action by beneficiaries.
As estate lawyers, we help beneficiaries hold trustees accountable by filing claims for breach of fiduciary duty and seeking appropriate remedies, including removal of the trustee or financial restitution.
Disputes Over the Distribution of Assets
Disputes over asset distribution are common in trusts and estates. Beneficiaries may disagree over who should receive specific assets or how the assets should be divided. These disputes can arise due to:
Family conflicts: Sometimes, family members have strong emotional ties to specific assets, such as a family home, heirlooms, or sentimental items, and may feel that they are entitled to them over other beneficiaries.
Unequal distribution: If the trust provides for unequal distribution of assets, some beneficiaries may feel that the grantor’s intentions were unfair or that they were left out of the distribution.
Claims by disinherited beneficiaries: Individuals who were excluded from the trust may challenge the distribution, claiming that the grantor didn’t have the right intentions or that they were unfairly disinherited.
We work closely with our clients to resolve disputes over asset distribution by reviewing the trust terms, discussing the grantor’s intentions, and helping beneficiaries or trustees work out an equitable solution. Sometimes, mediation can be an effective tool to avoid litigation and reach a mutually agreeable settlement.
Disputes Involving Will Contests
While trust and estate litigation often involves disputes over the validity or interpretation of trusts, some cases may also involve will contests. A beneficiary or family member may challenge the will or a provision within the will, arguing that the will is invalid due to reasons such as lack of capacity, undue influence, or improper execution.
These disputes can lead to both a will contest and trust dispute, especially when the terms of the will and the trust differ. If a will is contested, the trust may be affected, or vice versa, depending on how assets were designated.
As estate lawyers, we handle both will and trust disputes, helping clients understand how the two documents interact and guiding them through the litigation process.
How to Handle Trust and Estate Disputes
Handling trust and estate disputes requires careful planning, negotiation, and legal knowledge. As estate lawyers, we take the following steps to help our clients resolve these disputes effectively:
Review the Trust and Estate Documents
The first step in resolving any dispute is to thoroughly review the trust or estate documents involved. This includes not only the trust itself but also any related wills, amendments, and supporting documents. Understanding the intentions of the grantor and how the trust is structured is crucial to addressing the dispute.
Attempt Resolution Through Mediation
Mediation is often an effective way to resolve trust and estate disputes without going to court. Mediation involves bringing all parties together with a neutral third party to negotiate a solution. This can help preserve family relationships and avoid the high costs and lengthy timelines of litigation.
Seek Court Intervention If Necessary
If mediation or other forms of negotiation fail, we may recommend that our clients pursue litigation in court. This can involve seeking a court’s interpretation of the trust, challenging its validity, or taking action against a trustee for misconduct. Litigation can be a lengthy and costly process, so it’s often viewed as a last resort.
Keep Communication Open and Transparent
Throughout the dispute process, keeping communication open and transparent is essential. Estate lawyers play a key role in facilitating discussions between parties and working to find common ground. Our goal is always to resolve the dispute in the most effective and least damaging way possible.
Reach Out to Estate Lawyers Today
Trust and estate disputes can be stressful and emotionally draining, but with the right legal guidance, they can be resolved efficiently. If you're facing a trust or estate dispute, reach out to an estate lawyer to discuss your case and explore your legal options. Goldstein Mauer PLLC serves the New York City metro area, including the five boroughs (Manhattan, Brooklyn, Queens, the Bronx, Staten Island), Long Island, Westchester and Rockland Counties. Get in touch today.
