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Helping You Navigate Complex Legal Issues

3 common problems with trust administration

Gregory A. Lang

Establishing a trust is a great way to avoid probate and ensure the division of your property as you see fit. For families managing a trust, there are a few potential problems you might encounter during its administration. This part of the process takes place after the decedent’s passing and is typically an easier alternative to probate. Sometimes, however, you may find yourself in a courtroom after all.

The following are just a few of the most common issues you might encounter when dealing with trust administration. If it seems that a court battle is imminent, it may be beneficial to research legal representatives who can help you navigate the complexities of trust administration litigation.

Asset mismanagement

According to the American Bar Association, courts can remove a trustee from an estate for mismanagement of its assets. If the mismanagement is particularly egregious, it may warrant litigation, too. There are many forms this offense can take, including improper payment from the estate’s trust or even stealing directly from it. These or any other forms of mismanagement should be subject to investigation and rectification.

Contest of trust

In some cases, the someone may call the validity of the trust itself into question. If the mental state of the decedent is in dispute, for example, the trust may also be in dispute. Suspected fraud or the presence of an undue influence may also lead to a contest. If successful, this will invalidate the trust, and a court will likely determine how to divide the estate. Beneficiaries at risk of disinheritance may do well to invest in legal counsel. 

Fiduciary duty breach

Breach of fiduciary duty is yet another reason why trust administration may enter litigation. Fiduciary duty obligates both the administrator and trustees to act beneficially towards beneficiaries. Lack of fulfillment of this duty is a serious violation not to treat lightly. Self-dealing by a trustee is one example of this.

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