Q: What can a beneficiary do if a trustee isn’t following the trust? How can he force the trustee to do what he is supposed to do?
A: Trusts are legal documents. As such, they contain legally enforceable rights and duties. Sometimes trustees make mistakes when administering them. Although rare, trustees sometimes fail to comply with the terms contained within the trust.
When a trustee fails to follow a trust’s terms, the trustee may be in breach of his duties. When a breach occurs, a beneficiary has options.
I would start by reviewing the trust carefully. Make sure the terms are what you think they are. Don’t make assumptions about the terms; verify them. A lot of the time, there is a misunderstanding about the terms of the trust.
If the terms are what you think they are and you believe that the trustee isn’t doing something he should be doing, contact the trustee and discuss it. Explain your concerns to the trustee. Give the trustee an opportunity to explain his position. Most of these issues can be resolved by simply sitting down and talking.
You should also check the trust to see how you remove and replace a trustee. Sometimes a trust includes a provision that allows for a fairly simple removal of a trustee. Perhaps a new trustee with a different perspective is in order.
If after meeting with the trustee, you haven’t reached an agreement and you can’t remove the trustee, you may need to contact an attorney. Get a legal opinion from an attorney that has experience with trust drafting and administration. If the opinion supports your position, ask the attorney to write a letter to the trustee. Sometimes a letter from an attorney is enough to get a trustee to reconsider his position.
If none of this works, the next step may be to take legal action and force the trustee to comply. You should start by docketing the trust with the appropriate court. Once docketed, you can ask the court to enforce the trust and instruct the trustee to comply. If the trustee’s actions are severe enough, the court can remove the trustee and replace him with a new trustee.
If you have to docket the trust and rely upon the court system, be prepared for a long and expensive journey. Don’t expect the trustee to go away easily. The trustee may be as personally committed as you are, especially if the trustee new the grantor of the trust well. If it’s personal to you, don’t be surprised if it is personal to the trustee also.
Christopher W. Yugo is an Attorney in Crown Point Indiana. Chris’ Estate Planning Article will appear every Sunday in the Times. Address questions to Chris in care of The Times, 601 W. 45th Ave., Munster, Indiana 46321 or to Chrisyugolaw@gmail.com. Chris’ information is meant to be general in nature. Specific legal, tax, or insurance questions should be referred to your attorney, accountant, or estate-planning specialist.