Experienced trust dispute lawyers
A trust is a legal arrangement whereby one or more people (trustees) hold assets for the benefit of other people (beneficiaries). Those assets are often property or other investments.
A trust is created by the settlor who transfers his or her own assets to the trustees, specifying how and for whom those assets can be used and what powers the trustees have. A trust can be created during the settlor’s lifetime, but can also be set up in his/her will (in which case the “settlor” is known as the “testator”).
A trustee’s role is onerous and is often not explained when the trust is set up. Indeed sometimes a trustee can find himself / herself in that role unconsciously. Disputes can often be complex and valuable, and potentially have personal cost consequences for the trustee
There are many different types of trust, e.g. bare trusts, interest in possession trusts, discretionary trusts, accumulation trusts, settlor-interested trusts and non-resident trusts.
The law can also deem that a trust exists, even where no trust document exists. For example, a constructive trust arises where someone buys property and holds that property in his/her sole name, but for someone else (e.g. someone who has contributed in some way).
Disputes in relation to trusts can arise for a number of reasons, including
• The trust documents being vague, unclear about trustees’ powers or containing mistakes
• Negligent legal or tax advice when the trust was set up
• The trust document not reflecting the wishes of the settlor
• A co-trustee acting outside of his or her powers, being dilatory, refusing to disclose financial information or blocking decisions
• A trustee considering he or she can no longer work with a co-trustee, or realising that a co-trustee no longer has capcity to continue as a trustee such that the co-trustee needs to be removed
• Disagreement between trustees as to how a trust is to be managed or as to the relative interests of a life tenant and the remaindermen
• A co-trustee favouring certain beneficiaries, e.g. where he or she is also a beneficiary
• A trustee being worried about claims by beneficiaries if he or she exercises his or her discretion in a particular way
• A trustee being worried about personal exposure to costs arising from litigation which involves the trust.
Decisions on whether trustees should get involved in disputes and how they should pursue them carry potentially serious personal cost consequences for trustees.
Our team has experience in dealing with disputes in all of the above listed circumstances and many more.
We also work closely with our specialist Wills, Probate, Trusts and Tax Planning team, and advise on preventative measures that can be taken by clients to try to avoid trust disputes.