Trusts are an extremely valuable estate planning tool.
Trusts are unrivaled as a tool to bypass probate and protect both assets and beneficiaries.
Still, even the most carefully drafted trust could be subject to a dispute under the right circumstances.
When this happens, you may need a trust litigation attorney.
There may be a lot of attorneys in the Dallas area, but finding an experienced trust litigation lawyer is not as easy as you may think.
A Dallas trust litigation attorney can help you understand certain obligations and issues related to trusts.
Below, we will discuss some of the core concepts associated with Dallas trust litigation.
Trust Basics
A trustor (the person who creates the trust) creates a trust when they grant a trustee the right to hold and manage the assets or property of the trust on behalf of another person (the beneficiary). This relationship creates a fiduciary duty between the trustee and the beneficiary (discussed in more depth below).
Trusts can be either revocable or irrevocable. A revocable trust is one from which the trustor can remove assets. With an irrevocable trust, once the trustor puts the asset into the trust, the trustor can not revoke it.
The trustee may be able to sell or transfer the property, depending on the language of the trust, but the trustor can no longer revoke it or treat it as if it was their personal property. Some trusts will convert from revocable to irrevocable upon the trustor’s death.
Trusts can serve many different purposes. Trusts can serve as a way to bypass the probate process and distribute assets to the trustor’s heirs. Other trusts may have a more narrow focus, such as a special needs trust. Some people draft trusts in a way that allows beneficiaries to request payments from the trust as often as they like.
On the other hand, a trust with a spendthrift provision will severely limit the ability of a beneficiary to request payment. The advantage of such a provision is that trust property is better protected from the beneficiary’s creditors.
How Trust Disputes Happen
Trust disputes occur for a variety of reasons. For example, the beneficiary feels they are treated unfairly or the trustee is acting improperly. Other disputes could relate to the creation of the trust itself, like a party who believes the trustor was being taken advantage of.
Breach of Fiduciary Duty
As mentioned above, a trustee has a fiduciary duty to the beneficiaries of the trust. In Texas, the trustee is liable for a breach of trust to the beneficiaries.
One of the most important duties of a trustee is the duty of loyalty. The duty of loyalty requires a trustee to act in the best interest of the beneficiaries. Other duties include a duty to act impartially and a duty to incur only appropriate and reasonable costs on behalf of the trust.
Damages from a breach of trust could include:
- Loss or depreciation of trust assets,
- Profits made from the trustee’s breach of trust, or
- Lost profits from the breach of trust.
Trustees are typically protected from the decisions they make so long as they are acting in good faith.
Disputes About Creation
Another area of contention is the actual creation of a trust. Dallas trust litigation sometimes arises when someone believes the trustor was unduly influenced, lacked capacity, or was otherwise tricked or coerced into creating the trust. These claims sometimes arise when an elderly or ill trustor creates a trust.
Disputes also occur when a party believes the trustor wrongfully put items into trust, perhaps in an effort to defraud the objecting party. Examples of this could be a spouse who believes the trust was made mischaracterize community property (often in the case of an anticipated divorce). These disputes also arise when a party believes the trust was created to transfer an asset to avoid a judgment.
Claims that a trust is invalid are serious. These cases can be very complex and sometimes even involve allegations of criminal misconduct. Because of this, it’s a good idea to talk to a Dallas trust litigation attorney.
Talk to a Dallas Trust Litigation Attorney
A beneficiary dealing with a problematic trustee may want to talk to an attorney. The same goes for a trustee falsely accused of acting in bad faith. Dallas trust litigation is complex and time-consuming. A good Dallas trust litigation attorney can help you navigate these difficult waters.
The Hunnicutt Law Group is proud to feature a team of Dallas trust litigation lawyers with decades of experience. We would love nothing more than to use our knowledge and experience to help you.
Contact us today for your initial consultation.