Trusts are helpful tools in estate planning to avoid probate. As our Palm Beach County trust litigation lawyers have seen, all too often a trust creates more problems for those involved in administering them (the trustees) and those that inherit from them (the beneficiaries). Trusts can strain family relationships and lead to disputes.
Often, disputes involving a trust concern the action (or inaction) of the trustee of the trust. The following are examples of some common types of trust disputes:
- Breach of Fiduciary Duty
- Contesting a Trust
- Trust Reformation and Modification
Certain, but not all, trust disputes provide by statute that the losing party pays the other side’s attorneys’ fees and costs. Depending on the dispute, fee awards provide a benefit but also a deterrent in bringing the lawsuit.
Consultation with a Florida trust attorney is recommended in order to better understand your rights in proceeding with a trust dispute.
Breach of Fiduciary Duty
A trustee is an individual who administers a trust. A trustee owes duties to beneficiaries, qualified beneficiaries, other co-trustee(s), the settlor(s) and sometimes even creditors. Trust disputes arise over the trustee’s actions or inactions—namely the failure to prudently administer the trust. Trust litigation arises over a trustee’s failure to properly account for the beneficiaries and qualified beneficiaries who are entitled to an accounting no less than annually.
We have also handled disputes that arise when a trustee acts in their own self-interest, provides themselves excessive compensation or when the trustee fails to exercise the best judgment regarding safe-keeping and/or investing trust property.
Consultation with our team of Palm Beach County trust litigation lawyers is recommended to determine the appropriate remedy for a trustee’s alleged breach, including, the removal of the trustee.
Contesting a Trust
A trust can be challenged in Florida on the following grounds:
- Lack of capacity
- Undue influence
- Lack of formalities
An action to contest the validity of all or part of a revocable trust—or the revocation of part of a revocable trust—can not begin until the trust is irrevocable either because of the settlor’s death or by the terms of the trust.
Lack of Capacity
The person creating the trust, known as the “settlor,” must be of “sound mind” to execute a valid trust. The person who creates the trust must have the mental ability to understand the details outlined in the trust and the practice effect of the trust as executed. Lack of capicyty most commonly refers to a settlor who suffers from senility, dementia, Alzheimer’s or other cognitive impairment.
A trust is the product of undue influence if the trust is the product of another’s decision-making and judgment instead of the person making the trust. A presumption of undue influence arises when:
- A party occupied a confidential relationship with the settlor.
- A party was a substantial beneficiary under the trust.
- A party was active in procuring the trust.
Lack of Formalities
In order for the testamentary aspects of a revocable trust to be valid, the trust must be executed with the same formalities as a will. The trust must be in writing, signed at the end by the settlor—or another person at the settlor’s direction—and be signed in front of two witnesses, who each sign in the presence of the settlor and each other.
Trust Reformation & Modification
A trust may be reformed upon application and proof by clear and convincing evidence. Trusts are reformed because of mistakes in fact or law, or to conform to the settlor’s intent.
Trusts may also be modified to achieve tax objectives. For example, if the governing federal or state tax law has changed since the settlor created the trust, the trust can be modified by the Court to achieve the settlor’s tax objectives.
Contact our Palm Beach County Trust Litigation Lawyers for Help
For more information on the trust dispute process, contact the Palm Beach County trust litigation lawyers of Comiter, Singer, Baseman & Braun, either online or by calling us at 561-626-2101 or toll-free at 800-226-1484. We work with clients in Palm Beach County, including Boca Raton and Palm Beach Gardens, and throughout the state of Florida.