Trusts are legal arrangements wherein assets are held and managed by one party for the benefit of another. They are typically designed to be ironclad to prevent unnecessary disputes.
Yet, there are certain situations where disputing a trust becomes a necessity. Recognizing these signs is key for beneficiaries or concerned parties who believe that the trust isn’t functioning as intended or that it has been influenced by factors that may compromise its integrity.
Questionable changes or amendments
One of the most glaring signs that a trust may need to be disputed is if there are sudden or questionable changes made to it, especially if these changes occur under suspicious circumstances. This could include alterations made when the trustor, the person who created the trust, is in poor health, under duress or not of sound mind.
If a trust is changed to disproportionately benefit one party over another without a clear or reasonable explanation, beneficiaries should consider this a red flag. Similarly, if the trustor was influenced or pressured by someone to make these changes, this could be grounds for a dispute.
Lack of transparency or misconduct by the trustee
The trustee, who is responsible for managing the trust, should operate with complete transparency and in the best interest of the beneficiaries. If there’s a lack of clarity about how the trust’s assets are being managed, or if the beneficiaries suspect mismanagement or misuse of assets, this could necessitate a dispute.
Signs of misconduct may include the trustee refusing to provide information about the trust’s assets, accounts or management decisions. Additionally, if the trustee appears to be benefiting personally from the trust or isn’t adhering to the terms set out in the trust agreement, these are serious concerns that might call for legal action.
Inadequate representation of beneficiaries
In some cases, a trust may need to be disputed if it fails to adequately represent the interests of all beneficiaries. This can happen if the terms of the trust are inherently unfair, biased or if they neglect the needs of certain beneficiaries, although these situations tend to be relatively rare.
Ultimately, trust beneficiaries have the right to question things that they don’t feel are being handled in accordance with the law. Consequently, working with someone familiar with these disputes can be beneficial for everyone involved.