Who Pays For a Dispute Between a Trustee and Beneficiary?

Who Pays For a Dispute Between a Trustee and Beneficiary?

The distribution and management of family trusts are tricky. A beneficiary is owed a duty by the Trustee to marshal and account for all trust assets. A beneficiary is also entitled to receive all distributions specified in the trust.
Sometimes it seems like a Trustee is withholding a distribution from a sibling to get even for a childhood dispute like stealing a toy or not being invited to the circus. When that happens, the Trustee is clearly breaching their fiduciary duty. But how does a beneficiary enforce their rights?
The main obstacle for beneficiaries is the cost to enforce their rights. When a letter from an attorney doesn’t motivate a trustee to perform their duties, a beneficiary is forced to file a Petition in the Probate Court. The matter then proceeds like any other civil litigation matter, with parties completing written discovery, taking depositions, writing motions, attending hearings, and ultimately having a trial.
A trustee can use trust funds to defend themselves, although they may have to repay it if they are found to have breached their duty. But a beneficiary must pay their attorney themselves. Trust litigation is generally not the type of case that can be taken on contingency.
If a beneficiary is victorious at trial it is likely that the Court will order a Trustee to pay the beneficiary’s attorney’s fees. That benefit makes it absolutely worth while for a beneficiary to pursue their rights.
The attorneys at Cottle Keen Lopiccolo & Heyde have obtained favorable awards and settlements for trust beneficiaries. Call our office to learn how we can help you.

Dana M. Heyde is dedicated to making sure each client is fully informed about the legal process and feels comfortable with all the decisions made on their behalf. During her years of practice, Dana M. Heyde represented businesses in civil disputes by using cost efficient and focused methods.

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