But the Pizarro court affirmed the lower court’s ruling, holding that a Court has the inherent equitable power to award a trustee’s attorney’s fees and costs against the trust shares of a beneficiary, but (absent independent statutory authority) does not have the equitable power to make a beneficiary personally liable for a trustee’s attorney’s fees and costs.
Traditionally, each party to a lawsuit must pay their own fees and expenses, including attorney fees. Courts typically award litigation fees and expenses against another party only in cases where the other party engaged in egregious conduct such as bad faith or fraud. Not so in trust litigation.
Most beneficiaries don’t know this, but our judicial system follows the “American Rule” when it comes to attorneys’ fees. That means each party to a lawsuit pays his or her own fees and generally does NOT get them reimbursed even if successful in the lawsuit.
The question typically asked is as follows: “ can a beneficiary sue a Trustee ?” The simple answer is Yes, you can sue a trustee of a trust if you feel they breached their fiduciary duty, but remember, there are a few crucial factors you should consider before attempting to incur cost and time.
In case the creditors win, the trustee pays the legal fees. If the trustee refuses to turn over the administration to a successor trust company as required by beneficiaries, the courts can award legal fees to the petitioner. The trustee will have must to the legal fees as ordered by the court.
Trustees must follow the terms of the trust and are accountable to the beneficiaries for their actions. They may be held personally liable if they: Are found to be self-dealing, or using trust assets for their own benefit. Cause damage to a third party to the same extent as if the property was their own.
Yes, a trustee can be held personally liable if they are found to be in breach of duty or breach of trust. The state requires trustees to follow the terms of a trust to the letter.
The trustee is bound by a fiduciary duty to act in the best interest of the trust and its beneficiaries. This means the trustee can't just use the money or assets in the trust any way they want. But they do have some leeway in when they can take money out of the trust.
Typically when a trust is sued, a trustee is authorized to use trust funds to defend the lawsuit. This may happen even when it is the trustee himself who is being sued.
As a general rule, trustees are personally liable for the consequences of their own breach of trust. One way of protecting trustees is by limiting their duties under the trust deed to reduce the likelihood of a breach of trust.
When a trust breach occurs, a probate court can impose serious consequences and penalties, including suspension or removal as trustee or being surcharged – probate for being ordered to pay money – for damages caused by the breach. In rare and extreme cases, trustees can even face criminal charges.
The 65-day rule relates to distributions from complex trusts to beneficiaries made after the end of a calendar year. For the first 65 days of the following year, a distribution is considered to have been made in the previous year.
How can a beneficiary claim money from a bare/absolute trust? If a beneficiary of a bare trust is over the age of 18 years then they can simply ask the trustees to pay the money out to them that they are entitled to. As long as there is no other criteria to satisfy, the trustees should not refuse.
A trustee cannot lie about anything related to the trust. A trustee cannot provide false information to the beneficiaries or the court. For example, when a beneficiary asks about something relating to the trust, the trustee must answer truthfully.
In general, a beneficiary under a trust can assign his interest under it. If he does so, the assignee can sue the trustee for a breach of trust committed before the assignment: Scott on Trusts , ss. 132-132.2.
Explaining the potential risks and liabilities. Helping them carry out their duties and obligations. Assisting with interpretation of wills, trust documents, and other relevant documents. Assisting with keeping accounts and records.
A breach of trust may be deliberate or inadvertent; it may consist of an actual misappropriation or | misapplication of the trust property or merely of an investment or other dealing which is outside the trustees' powers; it may consist of a failure to carry out a positive obligation of the trustees or merely of a want ...