Just because you have a trust fund does not mean that you have to agree with everything that your trustee does, approves or denies. Indeed, during the New York trust administration process, beneficiaries possess the lawful authority to bring a lawsuit against a trustee if they suspect breaches of fiduciary duties or deviations from the trust’s terms. This legal recourse serves to safeguard beneficiaries’ interests and ensure faithful adherence to the trust’s objectives.
Grounds for legal action
Trustees may face litigation due to various infractions. A common basis for legal action is the breach of fiduciary duty. Trustees are obligated to prioritize the trust’s and beneficiaries’ best interests. This means that if they make any departure from this duty, those breaches are potentially actionable.
Another basis is asset mismanagement. Negligent handling or imprudent investment of trust assets can prompt beneficiary intervention. Similarly, any exploitation of the trustee position for personal gain constitutes grounds for litigation.
Communication lapses can also be the basis for legal action. Trustees are duty-bound to maintain reasonable communication with beneficiaries, and failure to do so can provoke legal repercussions.
Possible legal avenues
Beneficiaries pursuing legal action against trustees may opt for various forms of relief due to the actions of the trustee. You can ask for an accounting. This is a formal review of trust assets and transactions to ensure compliance with their fiduciary duty and the trust instrument.
If there has been some loss, you can seek recovery. Seeking restitution for losses incurred due to mismanagement is a pathway to ensure that your trust remains solvent, and you get what you are entitled to receive.
Even if there has not been a loss, you can also ask for the trustee’s removal. In severe cases of misconduct, beneficiaries can seek the trustee’s removal and ask the court to appoint a new trustee.
Procedural essentials
Initiating trustee litigation involves first establishing legal standing. Only vested parties, typically beneficiaries, possess the standing to initiate lawsuits. Next, you must bring some evidence of malfeasance. Beneficiaries must substantiate allegations of trustee wrongdoing. Finally, you must bring the claim within the statute of limitations. Lawsuits against trustees must be filed within a specified timeframe.
Conclusion
New York trust beneficiaries wield both the right and the means to hold trustees accountable for their actions, inactions, miscommunications and lack of communication. Familiarity with common litigation grounds and legal avenues empowers beneficiaries to protect their interests and the trust’s integrity effectively.