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Dynasty Trusts and Improperly Behaving Living Trust Successor-Trustees

On Behalf of | Nov 23, 2018 | Trust Disputes

Buffington Law Firm’s team of Trust and Estate Litigation attorneys have decades of experience in dealing with out-of-control successor-trustees of California living trusts.  This is an increasingly common problem in California as trusts, rather than wills, have become the main legal device for transferring wealth to the next generation.

The successor-trustee of a trust is charged with carrying out the terms of the Trust.  Usually this means paying the debts of the estate (trust), paying any taxes, and then distributing the assets.  Sometimes assets must be sold and converted into cash before the successor-trustee can actually carry out distributions to the beneficiaries.  The majority of trust instruments instruct trustees to do these things and then promptly make distributions.  Some trusts, however, have a different objective.

Some trustors (persons who create trusts) seek to keep the trust intact even after the trustor or trustors’ death.  These so-called “Dynasty Trusts” are supposed to live on after death, usually with the purpose of keeping the trust alive indefinitely with the successor-trustee making periodic distributions to the beneficiaries. As one trustor allegedly said, he wanted to “control the trust from the grave.”  In other situations while the trust is not explicitly intended to be a “Dynasty Trust” the very nature of the trust makes immediate liquidation difficult — perhaps the trust owns a going-concern business which does not lend itself to sale or liquidation.  In these circumstances successor-trustees often remain in their positions as trustees for many years, and often they develop a taste for remaining in control and taking trustee fees.

Buffington Law Firm’s trust litigation attorneys have dealt with numerous cases involving Dynasty Trusts in one form or another.  Unfortunately, while the trustors undoubtedly mean well, these trusts invite abuse, usually by the successor-trustee.  Not uncommonly, successor-trustees will take large trustee fees in exchange for their services as trustee.  At the trust’s expense, successor-trustees often or usually retain expensive legal counsel.  Often legal counsel advises them that it is perfectly fine for the trustee to take massive trustee fees — after all, most lawyers view their jobs as being advocates for their client and their client’s objectives.  When a successor-trustee hires a lawyer, the trustee is the client and the lawyer he or she hires invariably favors the trustees’ interests over the beneficiaries.  Often the trustees’ attorney behaves very aggressively towards the beneficiaries, while being paid by trust moneys which would otherwise be paid to the beneficiaries as distributions.

When this happens, the beneficiaries need legal counsel of their own.  The beneficiaries’ usual objective is to either dissolve the trust, remove and replace the successor-trustee, or both.  Buffington Law Firm’s litigation team has repeatedly succeeded in accomplishing these objectives and safeguarding beneficiaries against rogue, out-of-control successor-trustees.  If you are in this situation we invite you to call us for a no-obligation, entirely confidential free legal consultation. All such consultations are with actual experienced trust trial attorneys.  Call us today!