Challenges to a Trustee may come with a heavy price.
The person authorized to manage the affairs of a trust is known as a “trustee”. Generally, the trustee is given broad discretion in administering the Trust Estate; however, a beneficiary of a trust always has the right to challenge Trustee’s actions.
In a recent California case the beneficiaries of the Trust challenged the trustee’s sale of a piece of real estate to one of the other beneficiaries. The court concluded the sale was not a sham as it was permitted by the Trust Agreement. While the Trustee was authorized to sell the property to any one of the three people, the Court noted the Trustee had discretion with whom to consummate the sale.
The Court held that when a trust beneficiary instigates an unfounded proceeding against the trust in bad faith, a probate court has the equitable power to charge the reasonable and necessary fees incurred by the trustee in opposing the preceding against that beneficiary’s share of the trust estate. The court ultimately found the beneficiary’s position was not asserted a good faith and upheld the court’s decision to charge the beneficiary share of the trust estate with the fees incurred to defend the matter. However, the appellate court ruled that the court exceeded its equitable powers when it required the beneficiaries to personally pay the attorney’s fee which exceeded her share of the Trust Estate.
If you are considering a challenge to the actions of a trustee, you would be wise to confer with an experienced attorney. Careful consideration should be made to determine the basics for the challenge to avoid an unwarranted award of attorney’s fees if you are unsuccessful.
If you’re ready for immediate action with your trust issues, contact Drizin Law at (702) 798-4955 to speak with an attorney today.