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Trust Disputes and How to Solve Them

19 November 2021

Lauren Smith

There are various reasons why someone would choose to set up a trust. It is a way to protect your assets and ensure that your loved ones are financially stable following your death. They may also help you minimise any inheritance tax, and can in many cases be considered a more efficient way to distribute your assets. Disputes can arise between trustees and beneficiaries when the trust is being created and thereafter when the trust assets are being distributed. It can be difficult to know where to turn for advice and guidance . Luckily, there are will and trust dispute solicitors who can help.

Here at Taylor Bracewell Solicitors in Doncaster and Sheffield, we can utilise our extensive experience to provide expert legal advice when you find yourself involved in a dispute over a trust. We can analyse your case to determine whether you have a claim to make, and can gather the necessary evidence needed. In order to resolve trust disputes, seeking legal advice at the earliest opportunity, could be the best choice to secure a solution.

 

What is a Trust?

There are many types of trusts which can be created for a number of purposes. A Common type of trust is one which is created in order to ensure that an individual’s loved ones are financially protected in the future. Money or other assets such as property can be placed into a trust, which the trustee, or trustees, will be able to access under the terms of the trust instrument. Once the assets are moved into a trust, they will no longer form part of the assets of the person who previously held them, and that person would have to allow the trustees have control of them. Trusts are recommended if an individual wishes to safeguard their assets during their life or after their death.

There are various trusts that can be made, such as absolute trusts, discretionary trusts and loan trusts. To understand more about the rights and responsibilities of trusts, you can find the Trustee Act 1925 here. If you do require a trust then our Probate department can advise you on the different types of trusts available and which would be most suited to meet your needs.  There are tax implications for creating a trust and so advice before the trust is created is recommended.  For further information, we have a useful guide to the different types of trusts on our website https://taylorbracewell.co.uk/personal-law-services/wills-probate-and-trusts/trusts/  No matter the type of trust, disputes can still develop between trustees, beneficiaries and external parties.

 

Common Trust Disputes

Most commonly, disputes can arise between trustees and beneficiaries. Beneficiaries have a right to view some trust documents, but the trustees have full authority over the contents of the trust and how they are distributed. Common scenarios of disputes include the belief that the trustees are acting fraudulently or not acting in the best interests of the beneficiaries.  But disputes can also arise if the documents that created the trust are unclear, or there are concerns that it does not reflect the wishes of the settlor (the person whose assets went into the trust). 

It is the legal duty of the trustee to manage the trust accordingly for the benefit of the beneficiaries. Failure to do so can lead to significant financial losses, and claims can be made against them. If the funds have been mismanaged, used for the trustee’s own benefit or they have failed to pay the beneficiary what they are entitled to, then claims can arise. If you believe a trustee to be acting against the terms of the trust, or you wish to defend yourself against a claim, our trust dispute solicitors can help analyse your case and provide expert legal advice to determine whether your case can be pursued. To find out more about our services, please visit us on our website here.

 

Can a Trustee Be Removed?

If a trustee is not acting appropriately, or they are not following through with their duties, a request can be made for them to be removed, or they can voluntarily step down. Just because hostility exists between the trustee and the beneficiary does not usually warrant enough reason for them to be removed. Instead, there are several grounds that would justify a trustee being removed, such as:

  • A breach of trust, if the trustee has failed to follow the terms of the trust
  • The death of a trustee
  • The incapacity of a trustee, such as a lack of mental capacity
  • A trustee is being uncooperative
  • The trustee is absent
  • The trustee is biased

No matter the dispute which has arisen, our trust disputes solicitors here at Taylor Bracewell can help guide you through the process of making a claim, providing expert direction and advice. If you would like to find out more, please fill out our online contact form here.