Living trusts are a popular way to keep the family estate out of an expensive and time consuming probate. These estate planning tools allow the successor trustee to step in and administer the trust estate immediately upon the death or incapacity of the original trustee. But what happens when the successor trustee is not communicating with beneficiaries or distributing the estate? Below are ten tips for the beneficiary confronted by the problem of the trustee moving at a snail’s pace.
- Understand that no transfer of property out of a trust is automatic. Other than easily delivered personal property distributed in accordance with the trust, it all takes paperwork – which requires reasonable time to complete. This may involve real property deeds, titles to automobiles, stock certificates, and other types of transfers. Property must often be sold and sometimes title problems are encountered. Some financial institutions will be in no hurry to distribute the cash. The process also can be delayed by the sincere grief of the loss of a loved one. Although most trust assets can be distributed in a fraction of the time of probate, it’s better to not accuse a trustee of undue delay without knowing the cause of the delay.
- You may receive a letter from the trustee giving you a certain amount of time to challenge the validity of the trust. You must act within the statutory time frames. If you believe that you are harmed by an invalid trust you should consult a lawyer.
- Always maintain professionalism when dealing with a trustee. They were put in charge of the assets by the deceased trust settlor. The successor trustee can also use trust assets to pay for lawyers to deal with a disgruntled beneficiary.
- Remember everything is evidence – every email, statement, and act can be offered as evidence in Court. Judges dislike family feuding and will tend to gravitate in favor of the more professional and reasonable party. If you need to hire a lawyer down the road, counsel will be happy to not review long emotional email threads airing past sibling grievances that only tarnish the court’s impressions.
- If you believe there is no legitimate reason for a delay in the distribution of the trust, send a simple non-threatening letter to the trustee giving condolences if the successor trustee was close to the deceased trust settlor and asking when you may expect distribution of the trust assets. Also ask the trustee if anything is needed from you. This might include bank account and routing numbers for cash transfers, names for titling assets you are to receive, and other information. Send the letter by certified mail and keep a signed copy.
- If the successor trustee does not respond to the letter, or provide a valid explanation for the delay, you can turn to the Court for help. Few beneficiaries have the time or ability to effectively represent themselves in judicial proceedings, although there are exceptions. The fact is that you will probably need a lawyer to challenge the trustee or the validity of the trust in court.
- Ask your attorney about possible claims under NRS 163.115. These include but are not limited to seeking a court order to remove the trustee for breach of the trust, lack of cooperation among co-trustees, and persistent failure to administer the trust. The Court can issue a wide range of orders to compel a trustee to correct course. Also do a deep dive into the cost and possible benefits of a lawsuit. Weigh in the emotional tole and uncertainty of litigation. Is there enough at stake?
- Stay organized. Keep every letter, email, note, and other relevant documentation. Also, keep a diary of events, including conversations, distributions, and the actions of the trustee. The importance of a well organized file cannot be understated when it comes to trust disputes.
- Only file a lawsuit if you are acting in good faith and have probable cause for initiating expensive and stressful court proceedings. If you file a lawsuit in bad faith or don’t have enough to back it up, you can be ordered to pay the attorney fees and costs incurred by the trust in defending the lawsuit.
- Stay objective. Don’t make decisions based on emotions. Trust disputes usually involve families. They can be every bit as nasty as the most contentious divorces. You need to have a serious conversation with yourself and answer the question: Is it worth it?
Kevin P. Walsh, Esq. is a lawyer based in Reno, Nevada. More blogs on trusts can be found at 1SourceLaw.com.
Attorney at Law
Estate Planning Attorney in Reno, Nevada