A trust can be used as part of an estate plan. When doing so, a trustee is selected to distribute assets from that fund.
For example, it may be an educational trust. The money is supposed to be used for college tuition and related expenses. The beneficiary doesn’t get that money directly, but the trustee is supposed to use it on their behalf or give them payouts to cover their college expenses.
However, litigation sometimes happens between trustees and beneficiaries if there are accusations that the trustee has abused their position. Below are some ways that this could happen.
Using funds inappropriately
First of all, perhaps the trustee just allows distributions for any reason. Or maybe they give out distributions to someone who is not a named beneficiary of the trust. They are not performing their duties properly and they may need to be removed.
Embezzling the funds
Another issue that sometimes happens is that the trustee will start taking money out of the fund for themselves. After all, they have access to the account. But this is clearly a form of misappropriation, depriving the beneficiaries of the inheritance they deserve.
Refusing to make distributions
Finally, some beneficiaries just refuse to make distributions that should be paid out. A college student may not be able to cover tuition costs and lose their spot at university because the trustee hasn’t made the correct payments.
When serious disputes arise over issues like these, those involved need to know what legal options they have. A lot of money may be on the line and the dispute can become very complex, so it’s wise to seek experienced legal advice.