Trust & Estate Litigation in Charlotte

More About Trust & Estate Litigation

Trust and estate, or fiduciary, litigation often and unfortunately centers on disputes between family members.

In the context of a trust, the disputes most often center on a trustee’s alleged mismanagement of trust assets. Causes of action include negligence, gross negligence, and breach of fiduciary duty. Trey has represented beneficiaries and individual and corporate trustees in lawsuits of this ilk.

In the context of a will, the dispute typically centers on the accusation that someone exerted undue influence, duress, or fraud upon the decedent in order to improperly acquire title to property passing through the estate. Challenges to the validity of a will are called caveat proceedings and Trey successfully defended an unwarranted and meritless attack on the validity of a will in a jury trial.

Trey spoke at the North Carolina Bar Association on the topic of Breach of Fiduciary Duty: Causes of Action and Defenses.

Trey also presented an interactive webinar for the North Carolina Bar Association titled Alive and Well: The North Carolina Dead Man’s Statute.

The North Carolina Uniform Trust Code (Chapter 36C of the North Carolina General Statutes) regulates the creation, modification, validity, and termination of trusts as well as the fiduciary duties and responsibilities of trustees, including the grounds for their liability and removal.

Frequently Asked Questions About Trust & Estate Litigation

A trustee typically has the following duties:

  • duty of loyalty to the beneficiaries such that he or she not engage in self-dealing
  • duty of care to the trust property to collect and protect it, earmark it, and to not commingle it with his or her own property
  • duty to delegate to others the doing of acts which he or she should delegate to someone of greater expertise
  • duty of impartiality as to all beneficiaries
  • duty to inform and account to trust beneficiaries by making relevant disclosures

The most common causes of litigation regarding trusts are:

  • one or more interested parties believes the trust instrument is invalid
  • the beneficiaries disagree with the trustee as to how the trust is being administered and whether it is being managed according to the trust instrument
  • changed circumstances the settlor did not reasonably anticipate warrant a modification of the trust
  • the trustee is accused of breaching his or her fiduciary duties

While there is no exhaustive list of reasons for which a lawsuit regarding a trust may be brought, the most common reasons are:

  • undue influence of a beneficiary
  • the person who created the trust (the settlor) did so while under duress
  • lack of mental capacity to create the trust
  • the settlor was mistaken in some material fashion
  • the settlor’s creation of the trust was the product of fraud
  • the trust in question is the product of a forgery
  • breach of fiduciary or other duties of the trustee

The trustee can request that the settlor create the trust such that the trustee is excluded from personal liability and/or will be indemnified out of the trust assets for claims made arising out of or relating to the trust. Even so, the court may not enforce such provisions in the case, for example, of gross negligence or fraud. A prudent trustee would be wise to secure insurance policy for claims made related to the management of the trust.