Suing a Trustee of a Trust – And Winning

Sue Anyone in Small Claims Court Suing a Trustee of a Trust – And Winning

Suing a Trustee of a Trust – And Winning

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Is the trustee of your trust not properly investing, inefficiently administering the assets, or blatantly stealing from the trust. Most often, the loss and damages made by the trustee can be less apparent. Nonetheless, as a beneficiary, you have different legal rights that allow you to take action such as suing a trustee of a trust

In this article, we will explore what constitutes a breach of fiduciary duty and how you can use it as a probable cause to sue the trustee. We will also provide you with a simplified way of suing for damages through DoNotPay.


Suing a Trustee for Breach of Fiduciary Duty

There are many reasons why beneficiaries sue trustees. One of these could be due to a lack of transparency and inefficient asset management. But a serious legal ground for suing a trustee is a breach of fiduciary duty

A fiduciary duty is an obligation of the trustee to manage assets competently, honestly, and with integrity. Most lawsuits stem from the trustee failing to make regular distributions — paying creditors and taxes, distributing assets among stocks, real estate, and retirement accounts. However, there are more sinister happenings such as the trustee illegally unloading or moving assets because of greedy intentions.

Filing the lawsuit can be done in the local court where the trust is located. To win a breach of fiduciary duty case against the trustee, you must prove the following:

  • Trustee fails to provide an accounting to the beneficiaries, violating the beneficiaries’ right to an accounting
  • Trustee mishandled the estate funds
  • The trustee refuses to provide copies of the trust document, violating the beneficiaries’ right to information
  • Trustee is self-dealing and puts his/her personal interests first

Demanding Information from the Trustee

It may be challenging to determine when a trustee is not fulfilling his/her obligations. There are signs of mismanagement that you should watch out for such as delays, inaccurate accounting, unclear answers to basic questions, and many others. In some cases, you may not know the entire scale of the damage. If so, you may demand information from the trustee by following these steps:

  1. Demand relevant information from the trust including financial statements, escrow closing statements, property management reports, and more.
  2. Request a trust accounting that will declare assets, income, expenses, distributions, gains or losses from the sale of capital assets, and any other assets available.
  3. File for a subpoena for the financial statements to assess the accuracy of the accounting.
  4. Use the collected information as evidence to sue the trustee for mismanagement. 
  5. Choose an appropriate court to file the lawsuit: regular court or small claims court

Goals of Suing a Trustee of a Trust

Suing a trustee for mismanagement is a daunting process. In some cases, family members can become conflicted about whether to pursue legal action or not. Nonetheless, the outcomes of suing for breach of fiduciary duty may depend on individual circumstances and what the goals are. Some of the most common outcomes are:

 

Outcome Description
Removing or replacing the trustee It is the best option if a breach of fiduciary duty has been identified early on without having significant impacts on financial aspects.
Reorganizing proper distribution This is the best goal for scenarios when the trustee inappropriately distributed the funds or the beneficiary could benefit from faster distribution because of a financial issue.
Terminating the trust This can happen when the assets depreciate, there is no more purpose for the trust, or the trust becomes impractical. 
Recovering civil damages Trustees can be held liable for losses or mismanaged funds and can be sued for civil penalties.

How to Sue a Trustee with DoNotPay

Estate litigation may seem straightforward on paper, but in reality, it is not always the case. There are a lot of bureaucracies to go through, paperwork to complete, and demand letters to write. Let DoNotPay do the work for you! All you need to do is:

  1. Log in to DoNotPay and select the Sue Now product
  2. Quantify your damages in monetary terms
  3. Select whether you want a demand letter or court filing forms
  4. Describe the reason for the lawsuit and submit any applicable evidence

That’s it! DoNotPay will then generate a demand letter or court filing forms for you. We’ll also mail a copy of your demand letter to the trustee you are suing!

DoNotPay – The AI Lawyer You Can Trust

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DoNotPay doesn’t stop at helping you sue a trustee of a trust. As the world’s first robot lawyer, we’ve helped thousands of users sue anyone, from their next-door neighbors to big corporations such as:


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