Trust Litigation

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Serving As Trustee of A Trust? Not As Easy As It Looks!

Serving As Trustee of A Trust? Not As Easy As It Looks!

SERVING AS A TRUSTEE OF A TRUST:  NOT AS EASY AS IT LOOKS

One of the services provided by Legacy Law Center is trust administration.  When a person passes away with a living trust (or other type of trust) in place, the assets in the trust must be administered, i.e. managed and/or distributed according to the terms of the trust document.

Serving as a trustee sounds like a glamorous position.  You’re in charge of money and you have a lot of power over that money, right?  Well, it’s not that simple.  For starters, a trustee is a fiduciary.  A fiduciary is a person who has the power and duty to act on behalf of another person (usually referred to as a “beneficiary”) under circumstances that require total trust, good faith and honesty.   A fiduciary must avoid self-dealing (buying trust property themselves at a discount for example) and must avoid conflict on interests.

Here’s where things get tough for most trustees.  They are in charge of a trust in which they are likely a beneficiary and other family members are beneficiaries as well.  Even in the best of families, one person in charge of significant assets is going to create circumstances in which the trustee’s moves and motives are questioned at every turn.

“Why was Mom and Dad’s home sold and not kept?”

“That accountant the trustee hired is too expensive, they should have used my accountant. “

“The trustee is using trust assets for himself.”

“What happened to Uncle Dave’s fabulous gun collection?  Everything just disappeared.”

Rest assured, in most family trusts, once the assets are in control of the trustee, the worst assumptions and second guessing will begin.  In some families it starts on the day of the funeral.  If the trustee lets things fester, trust litigation can develop.

I’ve seen circumstances where the trustee could not take the emotional toll that the role put on them.  They were desperate for my firm to help.   Hiring a trust attorney to assist in the administration of the trust can create a firewall between the trustee and beneficiary while ensuring the trustee carries out their duties effectively.  For example, in the situation where the beneficiaries are already doubting the moves of the trustee even before they have the assets in their control, the trust attorney can send out a letter stating that the beneficiaries are welcome to contact the firm for updates but that updates will come via letter once they are necessary.  A letter from the attorney outlining the timeline for resolution of the trust is often a good way to set expectations.  When that letter comes from the trustee, second guessing can only worsen.

Our firm does not draft trusts without a no-contest provision which states that any beneficiary who files a lawsuit contesting the trust potentially loses their inheritance for doing so.  Now, there are exceptions to these provisions, but courts will uphold them on the belief that if the grantor of the trust (the creator of it) wanted that provision, they meant for it to be enforced.

Remember this as well:  The trustee in most trust situations does not have to rush through the process of identifying assets and distributing them.  That’s a competing problem for a trustee because working too fast can lead to mistakes and a fiduciary that makes mistakes can be personally liable. 

Ultimately, the best move a trustee can often make is to utilize the provision in the trust allowing them to hire professionals to handle the investing of trust assets (financial advisor), to account for them (CPA) and to deal with the legal issues of the trust (attorney).  Once these professionals are hired, a trustee will often find that the mob puts down their pitchforks, that a path with an end in sight develops and that they handle their duties more effectively and efficiently.

One more thing:  We always remind our trustees that they were chosen for a reason and their crazy brother and angry sister were passed over as trustee for a reason.   You were the one chosen because you were the most dependable.

 

 

Family of Robin Williams Involved In Estate Litigation

Family of Robin Williams Involved In Estate Litigation

FAMILY OF ROBIN WILLIAMS FIGHTING OVER HIS ESTATE

Mr.  Williams hanged himself last year at his home in California.  He apparently had created an estate plan but a dispute has resulted between his wife and his children over the distribution of his personal property (a very common source of disagreement in many estates) and the cash needed by wife to maintain the home which was distributed to her out of the estate.  Given the wealth of the late actor, we can assume the home was large and thus the annual maintenance to keep it up was a number which could be (and is being) disputed between the children and the wife.

Arguably, these details could have been included in the estate plan created by Mr. Williams.  The annual maintenance costs in prior years could have been figured and an estimated figure obtained, assuming higher costs in the future.  Nevertheless, it appears that was not done and now his survivors are fighting it out in court.  This not only wastes time and energy, but creates bad blood among family members, all of whom have undoubtedly been devastated by the loss of their father and husband.

The lesson here is that estate litigation can be avoided with proper and thorough estate planning.  The estate plan here probably just needed to be more specific as to the maintenance costs for the home for the wife.  As the article states, however, the family has already received many differences which is good to hear.  Often estate litigation cases can drag on for years without a resolution and their costs can be staggering.

Contingency fee probate litigation….

 

Duel

 

A contingency fee agreement is a type of legal fee agreement in which an attorney agrees to litigate your case without being paid for the legal fees until money or property is distributed to you.  This can mean that you have less risk of loss if the dispute is unsuccessful.   Our law firm will sometimes to a case on a contingency fee basis for larger probate and trust litigation matters in Missouri.  Usually we will only consider a case for this type of litigation if it involves more than $250,000.

Our firm is unusual in that most law firms that practice in the area of probate and trust litigation will only consider taking these cases if the client can pay fees on an hourly basis.   In some cases we will start a case on an hourly or flat fee arrangement and then consider a contingency fee arrangement after we have had more of a chance to investigate the case.

Contingency fee agreements can be well suited to probate and trust litigation.  Typically, in probate or trust litigation one or more children have been disinherited or have had their inheritance greatly reduced and one child or a non family member will receive most or all of the estate.

In these cases the child who will receive the bulk of the estate has control of the money and can often use it to hire an attorney to defend the challenged will or trust.  The children who are contesting the will or trust have to use their own financial resources to fund their litigation.  If they don’t have the financial resources to hire an attorney on an hourly basis then they may be left with two choices. First, don’t file the case.  Second, find a lawyer who will take the case on a contingency fee.

There is no one way to pay for the cost of probate or trust litigation.  Each person must evaluate their own case and circumstances to determine if an hourly rate or contingency fee makes the most sense for them.

If you have a trust or probate dispute in St. Charles County, St. Louis County or anywhere in Missouri, call Legacy Law Center to discuss your case and your options.