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The end-of-life process is hard on families, especially when the person who has passed away has not fully completed the estate planning process. Worse still, legal disputes can often arise surrounding how assets are distributed or managed during the trust process. In California, such trust litigation occurs most frequently when:
One of the most common causes of trust litigation is because of a delay. For example, after you pass away, the person that’s acting on behalf of the trust may fail to do what they are required, or anything at all, with the assets they are responsible for. If they haven’t started to administer the trust properly, the other beneficiaries may have to sue them in order to get access to their inheritance.
Frequently, it happens that administrators even use assets on their own behalf. One tragically frequent example in California is a successor trustee just living in the house for free and failing to sell it, or give the other beneficiaries their share of the inheritance as part of the trust. More clever abusers of the fiduciary duty as Trustee might try to buy the house for very little or sell the house to someone they know for a fraction of its value.
Administrators have a fiduciary duty to act on behalf of all the beneficiaries, so this self-dealing is a clear breach of the fiduciary duty. Resolving such cases requires substantial litigation and the assistance of fully qualified and highly experienced attorneys to navigate.
The deadline for filing a contest to a will or trust in California starts after the trustee sends out the notice. After this, you have 180 days to contest it in writing.
Phrasing and details are important, do not wait until the deadline, and always seek the advice and service of a qualified legal practitioner to ensure you avoid any mistakes that might impede your legal contest.
It is possible, as with any litigation, for either side to “win”, meaning their perspective prevails entirely. Ideally (and more frequently) the judge proceeds with making distributions as per the terms of the trust. It is preferable however for all sides to negotiate and seek out a resolution as quickly and equitably as possible.
As the trust is often paying for the legal fees, frequently for both sides, the trust proceeds may diminish substantially over a drawn-out court process. Amicable resolution is encouraged in order to avoid the trust proceeds being diminished, as it would be a shame for everyone to lose the real value of the assets being contested over to the attorney, legal, and court fees.
Even when there is no litigation or probate court process (when you go to court to have a titled asset partitioned, etc.), trust administration can be complicated and demanding. Trusts can be 50, 60, or even 70+ pages long, and without legal and/or financial experience you can quickly become lost or overwhelmed.
If you suddenly find yourself with all these assets, or trusts, but don’t know what to do next, that’s when you will need trust administration assistance. A seasoned professional can help you navigate how to contact the various government agencies involved, how to locate the assets, how to make the proper distributions to the beneficiaries, and then how to close out the trust properly.
Depending on the number and value of the assets, how to locate them, how to get access to them, etc. can be both time-consuming and complicated. Simple tasks like just gathering assets and notifying beneficiaries can take a year or more. In addition to being a lengthy process, mistakes can open you up to the very litigations discussed above, even unintentionally.
Do not let yourself fall into the cycle of fighting over inheritances, or risk your family fighting over yours. Hire seasoned professionals with experience avoiding trust litigation, and handling it deftly and painlessly should it arise.
For more information on Trust Litigation and Estate Planning In California, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (714) 400-2970 today.
Ms. Katje earned her Juris Doctorate at California Western School of Law, San Diego, California, graduated Cum Laude and was a Dean’s Honor List recipient. She was also a recipient of the American Jurisprudence Award in Contracts I and Contracts II. Ms. Katje was a member of the Law Review and International Law Journal at California Western School Law, where she was an Associate Editor.