Trust Litigation Attorney
A trust is one of the most common financial arrangements relied upon by those with significant financial assets, because of the many legal advantages they offer. Trusts and estates attorneys such as Jose Lorenzo provide advice on the wisdom and utility of setting up a trust. They also deal with the various types of trust and estates issues, including both trust disputes and non-contentious issues such as drafting trust documents.
What is a Trust?
A trust is a legal arrangement whereby a person who owns cash or other property, known as the grantor, transfers that property to another person, known as the trustee, with binding instructions to give that property to a third person, known as the beneficiary, under terms set forth in a written trust agreement. The trustee can be an individual or a company, and the grantor can name more than one beneficiary.
A trust may be used to transfer property to a descendent after the grantor’s death (without the need to go through the probate process), to transfer property to a child once the child reaches a certain age, or even to found a university or a charity. Trust property can be subject to tax liability just as other property can be.
A living trust can be revoked by the grantor at any time during his lifetime, and the grantor typically doubles as the trustee. The main advantage of a living trust is that trust assets are not subject to the jurisdiction of the probate court. After the death of the grantor, trust administration is vested in a successor trustee appointed in advance by the grantor. Trust assets can be distributed immediately, without going through probate, as long as the terms of the trust allow this.
A testamentary trust is an irrevocable trust established by the terms of the grantor’s will, and it instructs the personal representative of the grantor’s probate estate to establish the trust. The purpose of a testamentary trust is often to avoid distributing assets to the beneficiary in lump sum. A spendthrift trust, for example, distributes assets gradually, so that the beneficiary will not squander them. Testamentary trusts are subject to the jurisdiction of the probate court.
Disputing the Validity of a Trust
Disputes commonly arise among trust beneficiaries, or between the trustee and one or more of the beneficiaries. A trust beneficiary or other interested party may challenge the validity of a trust on the following grounds, among others:
- The trust failed to comply with the formalities required by Florida law by, for example, lacking the grantor’s signature, or lacking the two witnesses required to create a trust.
- The grantor lacked the mental competency to create the trust.
- The grantor was subject to undue influence by a third party (through fraud or coercion, for example).
- The trust document’s language is confusing or unclear (this scenario is especially likely if the trust document was not drafted by an experienced trusts and estates lawyer).
- The existence of the trust, or its specific terms, was procured by fraud — in other words, the trust or its terms was the product of a misrepresentation that deceived the grantor to the extent that the trust would would not have been created at all, or would have included different terms, except for the misrepresentation.
- The trust violated Florida law or should be modified or revoked for some other reason (it purports to distribute assets now owned by the grantor, for example).
Trust litigation is often emotional to the point of being gut-wrenching, and the application of trust law can get surprisingly complex. The objectivity provided by a third-party trust litigation lawyer can prove invaluable under these circumstances
Actions Against a Trustee
A trustee is subject to certain fiduciary duties, and the real or imagined breach of a fiduciary duty by a trustee often triggers trust contests among family members. A trust beneficiary might challenge the existence or administration of a trust for a variety of reasons, including breach of any of the following trustee duties :
- Duty of loyalty: The trustee must manage the trust for the sake of the beneficiaries, not his own interests.Other than a set fee paid to the trustee, the trustee cannot benefit from managing the trust, even if no beneficiary is harmed thereby.
- Duty of care: A trustee must exercise the degree of care in the management of trust assets that a “reasonably prudent investor” would exercise.
- Duty of impartiality: A trustee may not favor one trust beneficiary over another, unless the terms of the trust allow this.
- Non-delegation: Although a trustee may seek advice from lawyers, accountants or investment professionals, the final decision on the disposition of trust assets belongs to the trustee alone.
- Duty to keep accounts: A trustee must keep accurate records of the disposition and status of trust property.
- Duty to disclose information: Subject to certain restrictions affecting underage beneficiaries, a trustee must allow a beneficiary to examine trust property and documentation.
- Duty to keep control of trust property: A trustee must title bank accounts, real estate, etc. in the name of the trust, and must retain appropriate legal documentation.
- Duty to manage trust property: A trustee must manage trust property with care and skill. Failure to manage trust property might breach this duty, but recklessly investing trust assets might also constitute a breach.
- Duty to press claims against third parties who have obligations to the trust. A trustee must collect funds or property that belong to the trust, and must make reasonable efforts to collect debts owed to the trust.
- Duty to defend trust assets against third-party claims: A trustee must defend trust assets against questionable claims asserted by third parties..
- Duty to keep trust property separate from the trustee’ personal property: Co-mingling of trust assets with trustee assets or with the assets of another trust is generally forbidden.
- A trustee must file accurate tax returns on behalf of the trust.
A trustee is also subject to other duties that may arise by operation of law or by the exercise of prudent judgment.
Some of Our Practice Areas
Lorenzo Lawhandles the following types of cases, among others:
- Trust and probate issues
- Estate planning
- Estate litigation
- Probate litigation
- Probate litigation
- Trust litigation
- Estate planning
You Need an Experienced Trust Litigation Lawyer on Your Side
Jose Lorenzo is one of the few trust litigation attorneys in the Miami-Dade area who knows his way around the Florida court system well enough to effectively to fight for your rights. If you are involved in a dispute regarding a trust, or if you anticipate such a dispute arising, contact Lorenzo Law immediately.Call us at (305) 999-5411, complete our online intake form, email us at [email protected] or visit one of our offices in Coral Gables or Ft. Lauderdale.