The trustee of a trust owes the beneficiaries of that trust certain fiduciary duties of honesty, prudence, and loyalty. When those duties are violated by a trustee, a bequest may be put in jeopardy. Mr. Gold has extensive experience representing trustees and beneficiaries in trust litigation.
- Failure to make proper and timely distributions. The trustee is required to follow the terms of the trust instrument by making distributions to the proper beneficiaries and in the proper amounts. The trustee should also make timely distributions as well, instead of improperly retaining trust corpus.
- Improper investments. The trustee, as a fiduciary, is required to make prudent investments of the trust. Under the Uniform Prudent Investor Act, trustees are normally required to diversify the trust, make appropriate and suitable investments, and not take unnecessary risk with the trust investments.
- Self dealing. A trustee should not normally engage in transactions between the trustee and the trust, unless certain procedures are followed. Trustees that enrich themselves at the expense of the trust can be subject to double damages and payment of attorney fees in California trust litigation under Section 859.
- Excessive trustee compensation. The California Trust Law and California caselaw restrict trustee compensation to that of reasonable compensation. Trustees that pay themselves excessive compensation can be subject to surcharge in trust litigation.
- Interpreting ambiguous trust provisions. Unfortunately, not all trusts are models of clarity. In some instances, the terms of the trust will have to be interpreted, sometimes through litigation over the terms of the trust.
- Improper gifts from trusts and excessive distributions from a trust. There have been examples of trusts where the trustees will make gifts of the trust to third persons (or themselves) while the settlor of the trust is still alive. During the lifetime of the settlor, the trustee typically owes a fiduciary duty to the settlor of the trust only. At the death of the settlor, however, any beneficiary of the trust can take action to redress any breach of fiduciary duty that may have taken place prior to the death of the settlor. Depending on the extent of the gifting from the trust, the trust litigation can be monumental.
- Trust Reformation. A trust can be reformed if it does not reflect the trust intentions of the Settlor, typically because of mistake.
In addition to adversarial actions, Mr. Gold represents beneficiaries and trustees with other trust litigation issues, such as reformation or judicial amendment of a trust where such amendment is required to serve the settlor’s original intention in making the trust.
Please contact Attorney Andrew Gold at (650)450-9600 for a free initial consultation to discuss your trust litigation issues.