There is a lot to being a trustee of a family trust in Santa Clara County. As a trustee, you will have multiple responsibilities, including managing and distributing assets, maintaining record accuracy, settling any debts or taxes, and maintaining regular communication with beneficiaries. When disputes arise, failing to meet these obligations can expose a trustee to challenges, allegations of misconduct, and potential litigation.
Learn more about what to expect as a trustee when conflicts surface and how to protect yourself during trust-related disputes.
Trustees of family trusts in Santa Clara County have several key responsibilities that often become the focus of litigation.
For example, trustees must adhere closely to the trust document, which will indicate beneficiaries, timelines, strategies, and other aspects to provide some clear guidance. Alleged deviations from these instructions—whether real or perceived—are among the most common sources of trustee liability claims.
In complying with this document, trustees will be responsible for managing all assets, including physical property and any investments. If disagreements arise about how assets were handled, beneficiaries may initiate trust litigation to seek an accounting or removal of the trustee.
Trustees also need to maintain detailed records with accurate information aligned with the details of the trust document. These records could include information about beneficiary activities, audits, taxes, and more.
Incomplete or inaccurate records can trigger disputes, formal accountings, and court-ordered oversight—especially when beneficiaries suspect mismanagement.
Another area trustees must consider is settling debts, taxes, and expenses in a timely fashion to avoid potential financial issues. Ideally, the trustee would pay off all of these financials within the timeline disclosed in the trust document.
If these obligations are mishandled, beneficiaries may claim the trustee caused financial harm to the trust, potentially leading to surcharge actions.
After settling any debts and taxes, the beneficiary would be responsible for distributing all of the assets included within the document to the intended beneficiaries. Delays, unequal treatment, or unclear communication during distribution are common triggers for disputes and petition filings in probate court.
While managing the trust and all of its assets, trustees need to do what they can to avoid any conflicts of interest that go against the terms of the trust and the welfare of the beneficiaries.
Accusations of self-dealing or favoritism often lead to litigation aimed at removing a trustee or recovering damages.
If someone decides to set up a family trust and serve as a trustee in Santa Clara County, there are some critical steps to take, including addressing potential future points of conflict to reduce litigation risk.
First, it is important to decide whether a family trust is the right kind of estate planning document to establish. An estate planning lawyer may be able to help review the situation and determine whether a family trust is the way to go or if another alternative would be better.
For example, families may benefit from transfer-on-death or payable-on-death arrangements that connect beneficiaries directly to accounts or assets, eliminating the need to go through probate.
Choosing the wrong structure may create confusion later, which often fuels disputes among family members.
This document is essential to any family trust, outlining all of the details that trustees need to follow, including the agreement between the trustee and the beneficiaries and the assets involved, along with the specific timeline to follow.
Ambiguities or poorly drafted provisions frequently become battlegrounds in trust litigation, making careful drafting critical.
The next step will entail transferring asset ownership to the trust, at which point the trustee will be responsible for managing all disclosed assets. The listed assets could include bank accounts, real estate, investments, and various belongings.
Improper or incomplete funding is a recurring source of disputes, especially when beneficiaries argue that certain property should—or should not—have been included in the trust.
With the numerous responsibilities that come with being a trustee of a family trust in Santa Clara County, disputes can arise quickly when beneficiaries disagree with a trustee’s decisions or suspect wrongdoing. It may benefit you to connect with an experienced trust litigation attorney for guidance. The right attorney could defend you against allegations, help resolve conflicts, and protect your role as trustee throughout the litigation process.
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