You’ve probably heard of “trusts” before. Maybe in reference to trust fund babies or something only wealthy people are involved in, but trusts are actually a recommended legal move for anyone looking to manage their estate and assets after they’ve passed.

A trust is a legal framework for an individual or entity, or a “grantor”, to grant another individual or entity, or the “trustee”, the authority to hold a title, property, assets and what-have-you on behalf of a beneficiary. 

There’s a variety of reasons why someone would establish a trust, usually in the case of legacy preservation, to protect the grantor’s property and/or assets for the long term, as well as providing a legal and more organized way of transferring these assets to family and loved ones via a third party.

There are many types of trusts. There are estate trusts, family trusts, annuity trusts, charitable trusts, and so on. When it comes to estate planning, having a trust in place can go a long way in making sure your assets are transferred as you wish.

What Are Estate Trusts?

Estate trusts, or just simply “trusts”, are fiduciary agreements to hold and manage assets as between now and long after they’ve passed. A fiduciary is simply a “trustee”, or the third party who agrees to legally take care of another person’s money and possessions. 

Think of these as a legal arrangement between you and a trustworthy but unaffiliated party so that your affairs are in order.

The trust agreement will outline specific duties and responsibilities. The third party should be, as mentioned, unaffiliated, so that there is no conflict of interest when assets are transferred. It is the obligation of the fiduciary to act in the best interest of the party who is receiving the assets once the grantor has passed away. The fiduciary is highly recommended to exercise prudence in these matters and provide accurate accounting.

There will also be an outline of how expenses are to be organized, such as if a remainder of funds is to be held in a separate trust, and how much can be left aside for funeral expenses.

In the event of another death in the family, such as the death of the spouse, there should be instructions for how any remaining assets can be handled.

Why You’ll Need A Lawyer: Fiduciary Litigation

Fiduciary relationships exist beyond just on-paper agreements, but extend to all sorts of advisor, director, agent, guardian, or any personal representatives. If at any point, there’s a breakdown in communication and you find yourself, as a beneficiary, on the wrong end of the stick, you can take this dispute to court.

The fiduciary has specific duties to uphold when they establish a trust. Their responsibilities include a duty of care, a duty of obedience, a duty of good faith, and a duty of loyalty.

Fiduciary litigation is a legal dispute between a fiduciary and their grantors or beneficiaries. These are disputes due to either a withholding of any assets or funds and any breach of the trust agreement. Also, if there were any damages to the assets, that would be a breach of fiduciary duty.

Here are some of the potential damages brought on by fiduciary agreements:

• Breach of Trust: If the beneficiary determines that the fiduciary did not take good care, did not obey specific requests from the grantor, did not have the grantor’s best intentions in mind, or did not remain loyal to the grantor, they are in breach of their responsibilities. If any of these result in financial loss or emotional distress, the beneficiary may claim these as damages.

• Failure to Distribute: Even if accidental, a failure on part of the fiduciary to disburse all the funds according to everyone mentioned at the grantor’s request can hold them liable. For instance, a wire transfer to a distance relative that was never received, then that relative can seek compensation for any funds lost.

• Mismanagement: This accounts for any misplaced valuables or money, as well as poor maintenance or routine over an estate, or recklessly handles an investment, relatives and other beneficiaries may seek damages.

• Investment losses: Should the fiduciary oversee investment funds that see a negative profit, or if any action on part of the fiduciary prevents a potential investment opportunity, the beneficiary is entitled to claim any potential/projected earnings.

• Emotional Distress: The death of a loved one and close relative can already be a devastating blow as it is, so any loss of valuable, well-treasured assets on the part of the fiduciary can already add to that mounting distress. For these reasons, beneficiaries can take it upon themselves to claim additional damages. 

• Negligence: Say, for instance, the trust in question revolves around a property. If enough time passes following the grantor’s death and the property has not been maintained very well and depreciates in its value, that is considered a neglect of duties and as a beneficiary, you may claim these damages.

• Embezzlement, or “self-dealing”: One of the more serious fiduciary charges listed here, and often considered a dangerous white collar crime, embezzlement is the act of misappropriating funds entrusted to them for their own personal gain or agenda. It is considered an act of theft and would be a major breach of contract.

And when it comes to fiduciary litigation, there will be a magnifying glass placed over

Maladies and Remedies: How to Solve a Fiduciary Dispute

Your lawyer will work to gather all of the evidence about the dispute, from obtaining the trust agreement and reviewing all of the assets in question, how they were distributed, and determining the honesty of the fiduciary or the beneficiary. They will understand the adverse effects and consequences of all the potential damages and prove these in either negotiation or court.

There’s a few ways a dispute can be solved, and that is either in court, or negotiating a settlement outside of court. 

In negotiations, the parties may hold discussions or even depositions in their office to clarify misunderstandings and question either side to determine if there’s any inconsistencies in the story or misinterpretations of the will. Using their knowledge and expertise, your lawyer will negotiate with the opposing counsel, making offers and counteroffers to make sure you are fairly compensated for any losses or distress brought on by the fiduciary, and seek an amount that can remedy the dispute.

In trial, you may be called as a witness to testify about the fiduciary’s behavior and how they may or may not have honored their trust agreement with the trustor. Your other family members or close colleagues may be called in as well. Your lawyer will be prepared to litigate and fight for your case in trial before a judge and jury.