Even with a well-written trust instrument, a generational wealth transfer can be fraught with serious controversy given the often complicated family dynamics at play. Additionally, the trustee – the individual charged with managing the trust estate and making distributions from trust – is often a family member, friend or advisor with no prior experience as a fiduciary. Mistakes or misappropriations may follow that severely damage the interests of trust beneficiaries. Where some beneficiaries believe that their interests differ from those of the trustee, they may make accusations against the trustee. And beneficiaries may quarrel among themselves as to what, according to the trust instrument, each of them is rightfully entitled to. Issues may also arise as to whether an estate plan was the product of undue influence, or whether the person making the trust lacked testamentary capacity. Our firm, which has represented both trustees and beneficiaries, is adept at calmly sizing up trust disputes, assessing our clients’ litigation aims, applying solid, strategic thinking to the development of an overall case vision, and implementing that strategy through conscientious, hands-on advocacy that attains our clients’ objectives.
Here are some representative examples of trust litigation cases handled by the firm:
- Much trust litigation arises from the following scenario: children of a first marriage accuse their deceased parent’s surviving spouse of using undue influence to procure an estate plan overly favorable to the surviving spouse. Our firm represented the surviving spouse in just such a case, facing children determined to show the use of undue influence over their deceased parent, who they contended lacked sufficient testamentary capacity. Adding to the case’s complexity were a drafting error in the trust instrument, our client’s death during the litigation (we then took up representation of the children of the surviving spouse), and a radical amendment of the statute governing “no contest” clauses while the case was pending. Nevertheless, after engaging in a thorough analysis of medical records and interviews with business associates of the decedent – and after intensive discovery, which involved many hours of contentious depositions and the review of thousands of pages of documents – we were able to guide the matter to an advantageous settlement in the course of a mediation. And, drawing on our firm’s expertise in real estate transactions, we were able to handle the distribution of the trust’s properties as they were apportioned in the settlement.
- Trust litigation can arise when an issue comes up that is not explicitly dealt with in the trust instrument. In such a case, we represented a beneficiary who received considerably less in cash gifts from the trust than did the other beneficiary, and who requested, after the trustor died, that the successor trustee “even out” this disparity by adjusting the final distribution in his favor. We thoroughly researched the question, engaged in a careful interpretation of the trust language and undertook a comprehensive examination of all factors bearing on testamentary intent. In the end, we were able to develop a strong case for our client’s position. The matter was settled favorably to our client without the institution of litigation by either side.
- Suspicions can arise among beneficiaries when the trustee fails to maintain adequate documentation concerning a trust’s finances. Sometimes the trustee has acted honorably in dealing with and preserving the trust’s assets; he’s just not a good record-keeper. Other times, the trustee maintains poor records hoping to hide self-dealing or imprudent actions from the beneficiaries. Our firm has handled cases of this ilk on both the trustee side and the beneficiary side, which gives us a valuable perspective. We’re able to quickly get to the heart of the matter, determine whether in a given situation there’s only “smoke” or whether there truly is “fire,” and advocate effectively for that position in court.