Can You Sue a Trustee for Negligence?

Imagine you put your valuables in a box, and you ask someone, a trustee, to take care of your valuables. Unfortunately, the trustee may not follow your instructions. That causes your valuables to get damaged. In that case, you can take legal action to hold your trustee accountable.

This article explains suing a trustee for negligence. Each state has its own trust and probate laws. It’s best to talk to a trust litigation attorney in your area. They’ll know your state’s laws and can give you legal advice about your situation.

What’s a Trust?

While we earlier compared a trust to a box, a trust isn’t a physical object like a safe. It’s a legal entity created by a grantor. A grantor is also sometimes called a settlor or trust maker. The grantor lays out the trust’s terms in a trust document. Since a trust is a legal document, it’s enforceable in court.

The grantor puts their assets like money and real estate in the trust. You can think of it as putting your valuables in a box. The people who benefit from the trust and receive the trust’s assets are trust beneficiaries.

The trustee is the person who administers the trust. They make payments to the beneficiaries. The trustee is a fiduciary. That means they must properly manage the trust assets and follow the terms of the trust that the grantor laid out. They can be liable for monetary damages if they don’t.

What Are a Trustee’s Duties?

Trustees have a fiduciary duty, which means they must act in the best interests of the trust. They can be liable for a breach of fiduciary duty if they don’t.

But what are the best interests of the trust? Trustees have a duty of loyalty to the trust’s beneficiaries. They must keep the interests of the beneficiaries in mind when making trust decisions. That means following the terms of the trust. It also means not doing things for their own benefit over those of the beneficiaries. They must manage the trust’s assets in good faith. That means they can’t engage in any self-dealing, or trying to benefit from the trust’s assets themselves.

They must keep the beneficiaries informed about the trust’s status and activities and keep accurate records of the trust’s activities. This requirement is as much to protect the trustees as it is to protect the beneficiaries.

Breach of Fiduciary Duty Examples

Trust administration is complex. There are many ways a trustee can find themselves in trouble. The following are some examples:

• Not following the terms of the trust
• Not performing their trustee duties
• Mixing their personal assets with the trust’s assets
• Using trust assets for their own benefit
• Unnecessarily putting trust property at risk
• Wasting trust property
• Committing fraud
• Embezzling trust property

When Can a Trustee Be Liable for Negligence?

Negligence is when someone harms you because of a lack of care. Trustees can be liable for negligence when they breach their fiduciary duty to you as a beneficiary through a lack of care.

Trustee negligence often results from the trustee not understanding their obligations. For example, they may not know they must regularly communicate with you. That’s why it’s crucial to select someone reliable as a trustee. That could be a trusted family member or a professional trustee.

Contact a Trust Litigation Attorney for Help

Your state’s estate planning laws govern trusts and probate. A trustee’s failure in their duties can severely impact your ability to claim the benefits of a trust that you are entitled to.

If you are a beneficiary, you must prove the trustee failed in their duty to win a trust contest. An estate planning lawyer specializing in trust litigation can help determine if you have a case against a trustee. They can also represent you in your trust dispute.