Resolving Trust Disputes in Litigation

In California, the probate courts do more than just oversee the administration of a decedent’s estate. They also have the authority to hear trust disputes. Many people might be confused by this since trusts are meant to avoid the probate process altogether. But when problems arise with trusts or trustees that cannot be settled, these matters may need to go to court to reach a resolution.

What is Trust Litigation?

Trust litigation refers to the court process by which disputes are resolved between trustees and beneficiaries or third parties where trust assets are concerned. Importantly, a trustee has a fiduciary duty and legal obligation to ensure beneficiaries are kept informed. The trustee is also responsible for distributing the assets in the trust to beneficiaries, in accordance with its terms.

However, no matter how well-crafted the terms of a trust are, a beneficiary may need to file a lawsuit to obtain their rightful inheritance. Trust litigation can also arise in the event a trustee must reclaim property that belongs to the trust, or for various other reasons. Significantly, it is crucial to differentiate trust litigation from the probate process. Although trust disputes are litigated in probate court, probate is the court-supervised process of distributing a decedent’s assets — it does not, on its own, involve suing another party.

Common Reasons for Trust Disputes

There can be many reasons trust disputes occur. Often, when a beneficiary pursues litigation, it’s because they have a reason to distrust the trustee or there is a problem communicating with them. Some trust disputes might also arise due to the resentment of a relative who believes they received less than they had expected. While such cases are generally based on frivolous or unfounded claims, others may be legitimate.

Trust litigation is also typically commenced for the following reasons:

• The trustee fails or refuses to provide a copy of the trust
• The trustee refuses to respond to requests for financial information
• Failure to make timely or proper distributions
• The trustee has been administering the trust for a year or more and fails to account
• The trustee is taking assets from the trust to which they are not entitled
• The trustee is using trust assets for their own benefit, or that of family and friends
• Accusations of theft, co-mingling of funds, or self-dealing
• The trustee is not carrying out the terms of the trust

The trustee must send out a notice to all trust beneficiaries and heirs within 60 days of the settlor’s passing. If you are a beneficiary and did not receive such notice, you should make a demand in writing. Under California’s Probate Code, a beneficiary can petition the probate court for an order compelling the trustee to provide a copy of the trust instrument if they have not done so within 60 days after the demand was made.

What is Involved with Trust Litigation?

If you are able to communicate with the trustee, it is always easier, faster, and more cost-effective to resolve trust disputes out of court. However, if this is not feasible, you might have no other option than to consider litigating the matter in court. To start the proceedings, you must file a petition in the probate department of the Superior Court of California.

In most cases, after the petition has been filed, the case will go through the discovery process. This is the stage of litigation in which information is gathered by each side from the opposing party and third parties when necessary. A variety of legal tools may be used, including requests for admission, requests for production of documents, interrogatories, and depositions. Subpoenas can also be used to obtain information and records from third parties who are not involved in the action.

After the parties have gathered all the evidence to support their cases, they will likely discuss a settlement. In the event a settlement cannot be reached, the case will go to trial. Trust disputes typically do not have juries — instead, these cases are usually bench trials where the finder of fact is a judge. Like any other trial, the proceedings begin with opening statements and each side will then present their arguments and the evidence in their case. Parties can also call witnesses, whom the other side can cross-examine.

When both parties have finished presenting their cases, they can make their closing arguments. At this time, a judge will usually take the case “under submission” and issue a decision within 90 days.

Contact an Experienced California Trust Litigation Attorney

If you are facing a trust dispute, it’s important to have a knowledgeable attorney by your side who can best advise you regarding your legal rights and recourse. The attorneys at White & Bright, LLP have extensive experience handling trust litigation issues and securing positive outcomes for our clients. Call (760) 747-3200 or use our contact form to schedule a consultation to learn how we can help.