Trust Disputes
There are three kinds of trust disputes:
- Applications made by trustees;
- Claims brought by beneficiaries; and
- Third Party actions.
Trustee Applications
These include:
- rectification applications where a document needs to be rewritten in order to correct mistakes in that document;
- where the trust instrument is ambiguous and the trustees need the court’s assistance to clarify what is meant;
- applications to the court where the trustees are having difficulty in ascertaining the beneficiaries so that they would be protected if they were to make distributions;
- applications to amend the terms of a trust to authorise remuneration or for powers of management and administration under s.57 of the Trustee Act 1925; and
- applications to obtain the guidance of the court as to how to proceed, particularly where the beneficiaries are opposed to their action or where children are involved.
If a trustee is in any doubt as to their duties or if one of the above applications needs to be made, they should not hesitate to seek legal advice. Our Trust, Tax and Probate team can also advise trustees on their on-going duties when needed to ensure that they comply with their obligations under the Trust.
Beneficiary applications
Cases brought by beneficiaries against trustees include:
- claims for breach of trust; and
- applications to remove a trustee.
Examples of possible claims are where the trustee fails to seek advice from a specialist when he should have done so, where the trustee himself benefits from a transaction, where he fails to act impartially or failed to observe the required standard of care.
These cases can be particularly litigious and so it is recommended that advice is sought at the outset.
Third party claims
These are claims by or against third parties. For example, the trustees may have to bring an case against a tenant of a trust property.