This is the next post in my series on removing or challenging a trustee in our state. My last article discussed why trust beneficiaries should take action if their rights are being violated. It is important to bring the matter before the Court sooner, and not later, in such situations as waiting to do so can lead to squandering the trust’s assets. Taking immediate action, by contrast, can result in the Court freezing the trust so that no further mismanagement occurs. An experienced attorney can assist you with determining the best path forward. In this article, I will be discussing why litigation may not be necessary when one wishes to remove the trustee. If you are in need of assistance then contact my office today speak with a Melbourne, Florida trust dispute lawyer.
It is understandable that a beneficiary may want to take immediate legal action against a trustee when their interests are not being protected. The trustee, at best, may be poorly managing the trust’s investments or may otherwise be negligent in regard to their duties. Such negligence may include failing to timely send out trust distributions. On the other end of the spectrum, a trustee may be blatantly misappropriating funds. Immediately taking legal action through the Probate Court has its advantages, such as the Court potentially freezing the trust. Immediate action, however, can also have its disadvantages. These disadvantages include the fact that the trust may be “tied up” in litigation for months, if not years. Moreover, a portion of the trust’s resources may be lost to legal fees or other incidentals as the result of the litigation. For these reasons, it is important for a beneficiary to decide whether or not litigation is the best path forward.
There are many instances in which a trustee may voluntarily step aside from their role. If they voluntarily step aside then a successor trustee can quickly be named. This can allow management of the trust to continue without excessive interruption. If the dispute in the case stems from the misappropriation of assets, then the trustee may possibly volunteer to reimburse the trust as well. The reasons for which a trustee may volunteer to step aside, and to possibly reimburse the trust, are simple. If one receives notice that litigation is about to be initiated, then they may be willing to step aside for several reasons. First, stepping aside can save them substantial legal costs. Second, if one is found to have violated their role as trustee, then it can cause difficulty with obtaining certain financial roles in the future. Stepping aside can help to avoid this outcome. Finally, if one is well aware that they have violated the terms of the trust, then they may step aside due to the fact that they are likely to lose in litigation.
The foregoing is best explained through an example. Suppose Joe Trustee took over the family trust after his father passed away. It is his role to manage several pieces of investment real estate, contained within the trust, and to distribute proceeds to his siblings and cousins. Joe also works a full-time job. Rental homes have been vacant for several months due to Joe not being able or willing to take the time to show them to potential tenants. Furthermore, it is later discovered that Joe took $1,000 from the trust to pay personal expenses. One of the beneficiaries speaks with an attorney. Counsel calls Joe, explains that litigation will ensue unless Joe steps aside and returns the money. Joe is well-aware of the fact that he will likely lose in Court. Accordingly, he agrees to step down as trustee and he reimburses the trust. This saves all the involved parties the time, aggravation, and financial resources necessary to litigate the case. Furthermore, it allows for a new trustee to step in and rent out the vacant homes more quickly. While this example shows the benefits of avoiding litigation, it must be remembered that how to best proceed in any situation will always depend on the facts of the case.
If you are a beneficiary and are considering removing a trustee then contact my office today to speak with a Melbourne trust dispute lawyer. My firm recognizes that time is of the essence in such situations and we will give your matter the attention it both needs and deserves. I pride myself on providing a high level of service and I look forward to speaking with you. My firm also services Florida clients in the Brevard County cities of Titusville, Cocoa, Palm Bay, Grant, Valkaria, and Rockledge, as well as in the Indian River County areas of Fellsmere, Sebastian, Vero Beach, Indian River Shores, and Orchid. We are also able to virtually work with clients throughout the state.