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How Trustees and Beneficiaries End Up in Trust Litigation in Florida

Trusts are an invaluable estate planning instrument, as they can ensure that your heirs receive their inheritances according to your wishes. As the settlor (or creator) of a trust, you have full control over what, when, and how your property will be distributed. However, trusts are not immune from future litigation. If your heirs question your mental state, your trustee's motives, or the language in the trust instrument, your beneficiaries may contest the terms of the trust in court.

Common Factors in Florida Trust Litigation

In order to take legal action over the provisions of a trust, you must have legal standing and grounds to contest the trust. Legal standing is the right to make your case, while Lawyer Talking to Trust Litigation Clientslegal grounds are the reason you want the court to intervene. It's not enough to simply disagree with the terms of the trust—you will need a valid basis as to why those terms should not be carried out.

For example, people may enter trust litigation if they have suspicions regarding:

  • Someone's influence over the settlor. The terms of a trust may be contested if the person who created the trust (the settlor) was bullied, coerced, manipulated, or tricked into making certain provisions for another person's benefit. In these cases, a family member will have to prove that a relative or third party exerted undue influence over the settlor and that the changes to the trust were not made with the settlor's free will.
  • The mental state of the settlor. The State of Florida requires a settlor to meet a standard of testamentary capacity before creating or modifying a trust. If a settlor was suffering from brain damage, a degenerative condition (such as Alzheimer's or dementia), influence of drugs, or showed signs of a deteriorating mental state, heirs may contest the trust based on a lack of mental capacity.
  • The way the trust was executed. Florida law imposes certain requirements when executing a trust in order for the document to be legally binding. In addition to meeting the standards of mental competence, the settlor must follow the same formalities as a will when signing the trust.
  • The language in the trust. Ideally, the terminology and instructions used in a trust document should be as clear and straightforward as possible. However, just as with a will, certain passages may have different meanings depending on who's reading them. A trust that contains ambiguous or confusing language may require the court to issue a final interpretation of the passage.
  • The actions of a trustee. Trustee negligence is one of the most common reasons for trust litigation lawsuits. A trustee may be sued for a wide range of misdeeds, including illegal actions, acting contrary to the provisions contained in the trust, attempting to reform or modify the trust, or the removal of another trustee.
  • Whether the trustee has breached the fiduciary duty. Florida law imposes specific legal obligations on trustees, including a fiduciary duty to the beneficiaries. Essentially, a fiduciary has a legal responsibility to fulfill their required duties in good faith—and if they fail, they can be held personally liable for any losses their actions cause. A trustee may breach the fiduciary duty in many ways, most of them involving the personal enrichment or profit of the fiduciary. Selling trust property, collecting excessive trustee compensation, making unethical or imprudent investments, stealing assets or interest from the estate, failing to make adequate or timely distributions, administering the trust in a manner not specified by the trust document, and failing to provide timely and accurate accountings could all give rise to a lawsuit for breach of fiduciary duty.

Let Us Help You Navigate the Road Ahead

If you are the beneficiary of a trust or have been asked to serve as a trustee, we can answer your questions and make sure everything is done to the letter of the law. Contact DeLoach, Hofstra & Cavonis, P.A. to set up a consultation through our quick contact form, or start reading our free guide, The Top 20 Rules for Protecting Your Florida Estate.

 

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