Whoever you select to oversee your trust will owe a fiduciary duty to the beneficiaries of your trust. Hopefully, your trustee will not encounter any legal issues while administering your trust. Still, sometimes a trustee cannot avoid a date in court.
Smart Asset explains that someone cannot directly litigate a trust, but a trustee may become the target of a lawsuit. It is possible a person could sue a trust or contest it in court. Here is a look at how these two concepts differ.
Why people sue a trust
A person suing a trust is usually seeking compensation from the assets contained in the trust. To take an example, if your trustee gets into an auto accident while driving a car titled to the trust, the injury victims may sue to collect money from the trust itself as a way to get damages from the trustee. Creditors could also sue your trustee to collect trust money to pay off debts owed by your trustee.
Why people contest a trust
Contesting a trust involves litigating the terms of the trust. This can happen if someone thinks the trust lacks validity, perhaps because a malicious party forged the trust documents or doctored a legitimate trust document.
Sometimes family members suspect the trust creator was the victim of undue influence or elder abuse. They could believe a relative created a trust according to the whims of an abusive party. Relatives of the abused party may try to get a court to remove the trustee.
A good trustee may inspire confidence
The possibility that your trustee may have to deal with litigation is a good reason to select a competent trustee. Someone who acts in a professional and ethical manner may assure your beneficiaries that your trust is in good hands.
