A trust litigation attorney can provide you with advice or legal representation if you have questions about a Trust. These attorneys with extensive Trust litigation experience will analyze and identify specific ownership elements in the trust in dispute. They can deal with many legal matrices and unique loopholes with ease.
This article is the ultimate guide on trust litigation. It’ll provide you with information about it and other crucial things. But first, it would be best to understand the meaning of trust. Read ahead to find out.
What is a Trust?
Trusts are agreements in which one party holds the legal title of the other’s property for the benefit of a third party.
There are three parties involved in the trust:
- The ‘grantor’ is the party who makes the trust and delegates the title of their property to the trustee.
- The ‘Trustee’ is the individual or entity that gains the legal titles and governs and administers the trust.
- The beneficiaries are the parties who profit from the assets in a trust. It can be anybody, from the grantor, their dependents, and even the trustee.
Trust Funds: What Are They, and How Do They Work?
An institution or person who holds property for another person, group, or organization is a trust fund.
A trust keeps assets in a third party, or trustee, who manages them on your behalf. The trust fund’s assets might include stock, money, property, a business, or any combination thereof.
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
- Charitable Trust.
We can classify these as revocable or irrevocable, funded or unfunded, and living or testamentary.
Revocable trusts allow grantors to control assets and change trusts at any time. In contrast, we cannot alter an irrevocable trust after creation.
Unfunded trusts comprise the agreement and receive funding after the grantor’s death, whereas funded trusts receive funding from the grantor.
Upon the grantor’s death, a living trust provides for their beneficiaries.
Why Do People Create Trust?
The reasons for using trusts are many and varied. Their purpose is to protect the grantor’s assets and make sure their distribution happens according to their wishes. The trust benefits the estate by saving time, avoiding probate, reducing paperwork, and avoiding or paying less estate tax.
You can also use a Trust to protect your privacy by purchasing a property through a Trust so that your name will not appear on property records.
Trust agreements, however, are not always straightforward, as already mentioned. Upon creating the trust, the grantor signs a document called a Trust deed which transfers ownership of legal titles, names the beneficiaries, and describes the property in the trust.
Controversies are likely to occur when one or more parties feel they could interpret the trust differently based on its wording. Sometimes parties involved with a Trust can solve their differences outside of court, while other times, a court has to rule to resolve disputes.
What is Trust litigation?
A trust litigation process brings lawsuits through a trust litigation attorney against a trustee or third party by a beneficiary or by the trustee against a beneficiary. Trust litigation lawsuits seek the rightful inheritance of a beneficiary.
Trustees can also file trust litigation to reclaim property that belongs to the trust or have the court rule on the trustee’s actions.
Most trust litigation begins with the help of a trust litigation attorney because of one or more of the following reasons:
- To direct the trustee to give a copy of the trust
- Getting financial details from the trustee
- A court order instructing a trustee to do something
- To have the court order the trustee to account
- To regain the trust’s property
- Suspending the trustee’s authority
- Removing the trustee
- To recover damages from the trustee
- The appointment of a temporary trustee
- To name a successor trustee
The following are common scenarios of trust litigation:
- When beneficiaries contest recent amendments to a trust, they may claim a lack of capacity or undue influence.
- Accounting, particularly when beneficiaries, feel deprived of accurate or complete information about assets held in trust.
- The fiduciary duty is when a trustee breaches their fiduciary duty to beneficiaries; for example, unless your Trust deed states you can sell trust property, you could violate your fiduciary duty.
- Court Approval: When a trustee requests that the court assists with instructions regarding a particular transaction.
What to Know About Trust Litigation Attorney?
Disputes arising during the organized transfer of property between generations, i.e., between heirs and beneficiaries, require the help of a trust litigation attorney. They create trust so that they state clearly their instructions.
However, a well-drafted trust document can lead to legal issues that require the help of a trust litigation lawyer.