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Troublesome Beneficiaries in California Trust Disputes

On Behalf of | Jul 17, 2015 | Trust Disputes

Buffington Law Firm’s trust litigation attorneys have often achieved successful outcomes for beneficiaries in trust dispute cases in which trustees have abused their powers and failed to properly carry out the terms of the trust.  This article  discusses some of the considerations in these types of trust dispute.

There is another side of the coin, however.  Sometimes a trustee seeks to carry out his or her duties in good faith, but is victimized by a troublesome beneficiary who simply makes unreasonable demands or has unreasonable expectations.  From a legal standpoint this is not difficult for a beneficiary to do.  As a matter of law, trustees owe fiduciary duties to the beneficiaries of a trust.  This requires a trustee to act reasonably, competently, and diligently to carry out the terms of the written trust instrument.  If a beneficiary brings a Trust petition before a court making allegations of breach of fiduciary duty and the like, this can be an unhappy and troublesome circumstance for the trustee.  Most, perhaps nearly all, successor-trustees are private individuals who, while intelligent and honest, have never acted as trustees before.  Sometimes their actions, while harmless, are subject to some criticism.

Charitable organizations can sometimes be particularly troublesome beneficiaries.  Many charities, as a matter of policy, are reluctant to bring trust petitions against trustees except in the most serious situations involving breach of trust.  These charities wisely do not want to earn a reputation for tormenting the trustees appointed by a benefactor.  Successor-trustees, after all, are usually persons whom the original trustors loved and respected.  A few charities, however, are notorious for frequently litigating against trustees for perceived failings.  Buffington Law Firm suggests that when people are deciding upon naming a charity as a beneficiary, that they should have their attorney run a litigation check to determine whether that charity is  frequently litigious as a beneficiary.  Many charities know that the better estate planning attorneys recommend this, and recommend to their clients that they steer clear of naming such charities as beneficiaries.  As a result many charities are discouraged from meritless litigation.

A few charities will occasionally try to hide their propensity for bringing lawsuits by having an obscure other charity bring suit against a trustee “on behalf of” the larger, better known charity that was actually named as the beneficiary.  It is Buffington Law Firm’s legal position that this practice is not legal because the Probate Code makes no provision for such a surrogate entity to have standing to sue.  Further, this practice is contrary to public policy, as it can act to hide the litigious nature of a charity.  This is not a good thing and can result in a trust incurring unnecessary legal expense after the trustor passes.

If you are involved in a trust dispute, we invite you to call Buffington Law Firm for a free legal consultation.  There is never any obligation, and you will speak directly with an experienced trust trial lawyer who will explain your rights to you.