Trustees have a fiduciary duty to the trust’s grantor and beneficiaries. This duty generally means the grantor transfers ownership of certain assets to the trustee so that the latter may manage these assets for the grantor’s intended beneficiaries. If you are a beneficiary and note that the trustee failed their fiduciary duties, you may be able to take legal action against them.
Do you sue the trust or the trustee?
You generally cannot sue the trust directly because it is a legal entity and not a person. Instead, you file a lawsuit against the trustee who represents the trust. If you named yourself the trustee of your own trust, anyone seeking legal action against your trust may sue you instead.
What offenses can you sue a trustee for?
Beneficiaries who sue trustees usually do so because the latter failed to meet or perform the trust’s intended purpose. For example, you create a trust with your child as the beneficiary and the stipulation that they will receive payments sometime after your death. If the trust fails to distribute payments according to the stipulated timeline, your child might have grounds to sue.
You may also pursue legal action against a trustee whose negligence caused financial harm to the trust or one who committed fraud and used the trust’s assets to gain personal financial benefits. In cases with multiple beneficiaries, a trustee may face lawsuits if their actions show that they favor particular beneficiaries over others.
Trusts are inherently complex, and pursuing a lawsuit against a trustee is usually not as simple as suing a private individual. An attorney can advise you on your rights and the best course of action if you feel that trustees are failing their fiduciary duty to you.