A trust is a legal entity that allows the creator of the trust to transfer assets to one or more recipients, called trustees. The trustee or trustee holds legal title to the assets in the trust and manages them for the benefit of the beneficiary or beneficiaries according to the terms of the trust agreement. Trusts are often compared to wills. While they are both instruments that can be used to transfer assets from one person to others, there are some significant differences. One difference is that while will transfer assets only after the death of the testator, generally, a trust can be used to transfer assets during a person’s lifetime. Just like disputes can develop during the process of probating a will or estate administration, disputes can develop during the administration of a trust, leading to litigation. An experienced Michigan trust litigation lawyer would be needed for guidance if a trust-relate dispute develops.
Common Reasons for Trust Disputes in Michigan
A trust is a complicated legal arrangement that typically involves family. It is not surprising that disputes develop that end up having to be resolved by judge. Here are some common reason for trust litigation.
- Breach of fiduciary duty. The trustee is the person appointed to manage the trust. They are charged with managing trust property and making distributions to or on behalf of the beneficiaries. They are require to fulfill their duties with honesty, skill, and with the best interests of the beneficiaries in mind. They are not permitted to put their own interests above those of the estate. A breach of fiduciary duty action may be initiated by a beneficiary if they feel that the trustee mismanaged trust assets or in some other way breached their duty.
- Trust Contest. A trust contest is a type of litigation during which someone challenges the validity of the trust. The petitioner asks the court to dissolve the trust because there was an illegality in the manner of how it was created. One reason for a trust is an allegation that the trust creator did not have the legal capacity to execute it. A trust creator must be of “sound mind” when they execute the trust. This means that they must understand what they are signing and why they ae signing it. If there is evidence that the trust creator had dementia, for example, and their cognitive abilities where severely impaired at the time they executed the will, the will would not be valid. Oher reasons for invalidating a trust include improper execution, undue influence, and fraud. If you suspect any of these things, contact an experienced Michigan trust litigation lawyer.
- Trust Construction. Ideally the language of the trust agreement would be clear and the intent of the trust creator would be evident. That is not always the case. A trust construction action is required when the language of the trust is open to multiple conflicting interpretation and the trustee asks the court to rule on the meaning of the language at issue.
Legal Standing to Initiate Trust Litigation in Michigan
As an experienced trust litigation attorney in Michigan will explain, trust litigation cannot be initiated by anyone who feels that there is an issue related to the trust. The person initiating trust litigation must have legal standing. Legal standing refers to a person’s relationship to the issue before the court. When it comes to trust litigation, generally, only the trustee, beneficiaries, and remainder beneficiaries have standing to initiate litigation.
Initiating Trust Litigation in Michigan
Not every trust dispute must end in litigation before a judge in court. There are alternative ways to resolve disputes. Sometimes even disputes that seem too complicated or bitter to resolve without a judge can be resolved through alternative solutions such as negotiation, mediation, or arbitration. An experienced trust litigation attorney serving Michigan can help determine the best strategy to resolve your trust dispute, including litigation, if necessary.