Trust disputes and trustee issues

Trust disputes can arise where trustees and beneficiaries disagree over management, decisions or accountability. Our experienced team advises trustees and beneficiaries on resolving disputes, enforcing duties and seeking court guidance in relation to trusts, including supervision, variation and removal applications.

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CONTENTS

Understanding trusts and trustee duties
Duties owed by trustees
When trust disputes arise
How we can assist with trust disputes
FAQs

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Understanding trusts and trustee duties

Trusts can arise in various different circumstances. A trust may be established by a person during their lifetime or on their death under the terms of their will. Trusts can sometimes arise in situations where the parties did not necessarily intend to create one.

What all trusts have in common are trustees; people who are responsible for managing the trust fund and making decisions, and beneficiaries; those who are entitled to or potentially entitled to benefit from the trust fund.

Trustees have various powers but are also subject to duties that they owe to the beneficiaries.

Duties owed by trustees

A trustee will normally have the following duties:

A duty to act in accordance with the terms of the trust;
A duty to exercise reasonable care and skill;
A duty to act unanimously with co-trustees unless the trust provide otherwise;
A duty to be ‘ready with their accounts’; and,
A duty to avoid conflicts of interest between their own interests and the beneficiaries’ interests.

Depending on the terms of the trust, a trustee’s duties can be varied and there are various other duties that will apply.

The core of a trustee’s role is accountability to the beneficiaries. It is a fiduciary role meaning that a trustee must act in the best interests of the beneficiaries as a whole.

When trust disputes arise

Trusts can be complex, yet no qualifications are required to become a trustee.

Disputes can arise between joint trustees who cannot agree on a course of action, and between trustees and beneficiaries where beneficiaries are unhappy with how a trust is being managed or where they believe that a trustee’s actions have caused loss to the trust fund.

The court has an inherent jurisdiction to supervise trusts and both trustees and beneficiaries are entitled to ask it to intervene in cases of dispute or uncertainty.

How we can assist with trust disputes

We regularly advise and represent both trustees and beneficiaries in the following situations:

Claims against trustees for breach of their duties and recovery of any losses caused by the breach;
Claims to remove or replace trustees or to add new trustees to the existing number;
Applications to compel trustees to provide trust documents or accounts to the beneficiaries;
Applications to the court for directions as to how the trust should be managed;
Applications to the court by the trustees to approve or ‘bless’ a proposed course of action or to exercise discretion on behalf of the trustees;
Applications to vary trusts under the Variation of Trusts Act 1958;
Applications to the court to determine the meaning of ambiguous or uncertain terms in a trust document;
Applications for rectification of mistakes in trust documents; and,
Claims by trustees against third-parties to recover money or property on behalf of the trust.

Please see our FAQs below or get in touch with a member of the team today.

Frequently asked questions

We have answered some of the more frequently asked questions we receive. If you have a question that is not answered below, please contact Jason Oliver.

I am a trustee of a discretionary trust which identifies certain classes of potential beneficiaries, including all of the settlor’s children – some of whom were estranged. However, I also have a letter of wishes from the settlor which expresses her strong desire that the whole fund should be paid to one of the children. I have considered matters carefully and have decided to follow the letter of wishes. One of the estranged children objects and has threatened to sue but has not done so. I am worried that if I follow the letter of wishes then I will be sued and there will be no money left either to defend the claim or to pay it if it is successful. What should I do?

The key word is “discretionary”. Ultimately, the decision as to what to do is one for the trustees to make, and the court will not usually interfere with that decision. You are right to be concerned about the actions of the estranged child, though. Although there are other options, the safest course of action would be to apply to the court for a “blessing order”, i.e. to obtain the court’s approval of the decision that you have made. If the court is persuaded to make an order to that effect, that will prevent any action being taken against the trustees. We can advise on all the options and assist with whichever solution you wish to action.

I am a co-trustee of a discretionary will trust. The trust only has one asset, a property. There was originally some cash as well, but this has been spent on maintaining the property. The property produces no income and so debts are building up in respect of the regular outgoings. The sole beneficiary is adult and has capacity. He wants us to give the property to him and wind up the trust, but has no workable proposal about how the debts should be settled. What should we do?

If the circumstances were different, the beneficiary could rightly call for the trust to be wound up, but not in the situation you describe. He cannot expect you to transfer the property to him, since there would be nothing left to settle the debts, for which you are personally liable. As trustees, you are entitled to retain so much of the trust property as is necessary to settle the debts, and this can only be done by selling the property. If the beneficiary could pay the debts from other resources and give you a worthwhile indemnity for any other potential liabilities, then you could do as he wishes, but not otherwise.

How we’ve helped our clients

“Jason’s expertise helped us confidently navigate a difficult will dispute. We are grateful for his efficiency, and empathy throughout this process. Thank you Jason for getting us a resolution allowing us to move forward with our lives.”

Shari Gallop – Contentious Probate Client

“Responsive progress when required; felt advice given was appropriate and helpful without emotional bias (which was much appreciated In the difficult circumstances I was put in). I felt that Jason Oliver was ‘going the extra mile’ for my mother and myself.”

Client – Contentious Trust & Probate

“Jason quickly analysed correspondence I shared, together with background from our phone discussion, to prepare a very relevant and helpful response to a letter of claim in connection with my role as an executor. Definitely gave me confidence and put my mind at rest.”

Contentious Trust Client

“It is over a year now that I was faced with trying to resolve the matter and I can’t thank yourself, and in particular Oliver enough for bringing this to a happy conclusion after many unpredictable shifts and turns.”

A Client in a Probate Dispute Case

“When a distant relative died, unexpectedly I found myself as executor of her will. It was being administered by the solicitors who had been holding the Will. Annoyingly, the Will had been badly written and contained mistakes and ambiguities. It became obvious to me that those dealing with it were incapable of resolving the situation and were wrongly pursuing pointless and expensive lines of investigation. I mentioned this to a friend who told me that while dealing with Paris Smith he had learnt that they had a man who specialises in bad wills. I approached Paris Smith and Jason Oliver said that he could help me. Jason considered all the facts and immediately stopped the administering solicitors from proceeding further. With his expertise he was able to resolve the complex issues while keeping me fully informed at all times. He guided me through Zoom meetings, dealings with barristers and High Court procedures. Best of all, the estate was finally divided as originally intended. I was very impressed with the professionalism of Jason Oliver and would recommend him to anyone requiring legal advice and guidance. ”

Gerry Burnell

“I used Paris Smith in a family situation that I was finding immensely stressful. Jason listened carefully, and gave the time required to understand the problem. He followed up the initial meeting with some very sound advice, and had a great knack of cutting through the emotion to work out the issues. I remain very grateful for his pragmatic and level-headed approach.”

“As we discussed at the beginning, it was never about the small cash inheritance but more of the injustice of being unrecognised as equals. Finally we have peace of mind. Therefore we would like to again thank you for your continued support, expertise and professionalism throughout. We couldn’t have done it without you!”

Clients with a probate dispute

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