There are a wide variety of instruments that can be used to craft your estate plan. A well rounded estate plan will likely include several different documents, such as your last will and testament, a durable power of attorney, a living will, or a trust. Each estate planning instrument has its own benefits and drawbacks, and each has the potential to confer heavy responsibility on a person who is not the testator or the creator of the trust. If you create a trust, you will need to select a trustee. A trustee is responsible for managing the assets in the trust and administering the trust according to the instructions in your trust documents and according to the law. The trustee has a fiduciary duty to the trust, which means the trustee is obligated to act in the best interest of the beneficiaries of the trust. If an interested party, such as the beneficiaries, believe the trustee is not acting in the best interest of the beneficiaries, they can bring an action in probate court alleging that the trustee has breached his or her fiduciary duty.
In an action to prove the trustee has breached his or her fiduciary duty, the burden of proof will be on the person who alleges the breach. A trustee could potentially breach his or her fiduciary duty by self-dealing or mismanaging the assets in the trust, just to name two examples. The plaintiff will be responsible for bringing evidence that the trustee has acted against the beneficiaries’ best interest. Beneficiaries are entitled to an accounting of the assets contained in the trust and how those assets have been managed. If the accounting does not provide sufficient evidence standing alone, the parties may engage in discovery. During discovery, the parties can request documents and information from the other party. In this type of case, it would be common for a beneficiary to request a copy of the trustee’s personal bank account statements, for example. Such statements could provide evidence that, for example, the trustee has been stealing money from trust. The type of evidence a plaintiff will be required to produce will depend on the manner in which the plaintiffs allege the trustee has breached the fiduciary duty.
We can help you with your estate planning issues, including trust litigation. Call us at (651) 371-9117 for a consultation to talk about your estate plan.