Buffington Law Firm's team of trust dispute litigation attorneys has decades of experience in dealing with problem situations involving California Living or "revocable" trusts. Many of the problems that we are asked to solve deal with situations in which, for some reason or another, the trust was not wound up and terminated with the assets promptly distributed to the beneficiaries.
There can be many reasons why a trust is not wrapped up quickly. Problem successor-trustees is one common reason. Sometimes the trustee just sits on the assets, "milks" the trust for trustee fees, or simply enjoys the assets him or her self -- a common example of this is the trustee living rent-free in some trust real property asset. "Milking" the trust for multi-year trustee fees is another common problem with trusts that are not wrapped up right away. The worst type of trust situation inviting trustee abuse can involve situations where the trust is not designed to terminate at all -- a designated trustee is supposed to manage the trust perhaps for decades for the benefit of the beneficiaries. These types of trusts, so-called "dynasty trusts" particularly invite conflict between trust beneficiaries, who often simply want to receive their inheritances and go their own ways. The successor-trustee, by contrast, wants to remain in power and continue to collect often-lucrative trustee fees.
Enter the concept of a "Trust Protector." In recent years Buffington Law Firm has encountered this phenomenon more and more -- where a trust writing specifically provides that a certain entity, usually the law firm that drafted the trust in the first place, shall have the authority to act as a "Trust Protector" (or sometimes just "Protector"). Sometimes these provisions are clearly written; other times the role of the "Trust Protector" is vague, and appears to be solely advisory.
The original "Trust Protector" concept was simple: the Trust Protector had one sole power: to fire the Successor-Trustee. If Uncle Goober was the trust's successor-trustee and the Trust Protector decided that Uncle was a bad Successor-Trustee, the Trust Protector could fire and replace Uncle Goober, presumably without Court action, which can take time and cost a lot of money. The notion was that the Trust Protector would have absolute discretion to fire the successor-trustee and no other authority whatever. This type of provision can be a safeguard against bad successor-trustees who will fight removal in court, almost invariably using trust assets to pay their well-compensated attorneys. By contrast, beneficiaries often must pay their own attorney's fees out of their own pockets. Unfairness can go little further, but that is often how it works.
If you are involved in a situation involving conflict between beneficiaries and the successor-trustee, Buffington Law Firm has decades of experience in solving these problems. We invite you to telephone us for a free legal consultation. All conversations are with actual, experienced trust litigation attorneys, there is no obligation, and the consultation is completely confidential and protected by attorney-client privilege.