Before we can discuss what trust litigation is defined as, we should first start with the definition of a trust. A trust is a legal creation with the purpose to keep assets for beneficiaries. The trust is controlled by a trustee, who is selected by the creator of the trust, known as the grantor. There are many different types of trusts but the two most common trusts are revocable trusts and irrevocable trusts.
At Bott & Associates, Ltd., we have helped countless families create trusts and manage them upon their loved one’s death. It’s our goal to make sure that all of our clients feel comfortable knowing what will happen when they create a trust.
Revocable Trusts vs. Irrevocable Trusts
A revocable trust is a living trust in which the grantor controls the trust and the assets in the trust for their lifetime. An irrevocable trust is a living trust in which the grantor places assets and property into the trust but gives up full control of those assets. In a revocable trust, the trustee is now responsible for managing those assets for however long the trust was created to last.
Why Should I Create a Trust?
Trusts are extremely useful when it comes to estate planning. Items that are placed in a trust avoid probate. Probate can be extremely lengthy and expensive. By placing items in a revocable or irrevocable trust, a trust administration lawyer can avoid the probate process. In addition to the time and money probate can cause, probate litigation is unfortunately very common in Palatine, IL. Some of the most common types of probate litigation are caused by beneficiaries who believe they should have been in the trust but were not included. This can occur if a trust was amended and beneficiaries were taken off the trust while others were added, and family disputes arise.
Common Trust Litigation
An example of trust litigation would be if a father has two daughters. He created a trust and both daughters were equal beneficiaries of the trust. Ten years after he created this trust, he remarries. The father suffers from dementia and his new wife takes him to an attorney. The new wife tells her husband to create an amendment to the trust to remove his biological daughters from the trust as beneficiaries and to add her and her biological children as beneficiaries instead.
Unfortunately, this kind of trust litigation situation can be quite common. In this instance, the biological daughters could file a claim against the trustee to have that amend put aside for a few different reasons: the father was not in the right state of mind to create an amendment; his new wife was pressuring him to create the amendment; and it could be interference with a testamentary expectancy.
Another common reason for trust litigation is due to accounting. Trustees are required to provide the beneficiaries with an annual accounting. It is a required document that explains to the beneficiaries what happened to all of the assets within the past year. If this is not provided to the beneficiary, or if it is incomplete, it would be considered a breach of fiduciary duty. If this is a regular occurrence, or if it is clear the trustee has been acting without considering the best interest of the beneficiaries, the trustee could be removed.
Contact Bott & Associates, Ltd.
Trusts can be very complex, so if you’re considering writing one, it’s recommended that you meet with a trust administration lawyer for assistance. At Bott & Associates, Ltd., we’re here to help. Call us today to schedule a consultation with a trust administration lawyer Palatine, IL families know and trust.