Do I Sue the Trust or the Trustees?
A judgment against a trust might be unenforceable depending on the trust’s purpose and if the trustees are named in the complaint.Can You Sue a Testamentary Trust to Collect on a Decedent's Personal Debts?
Complaints against testamentary trusts, or trusts created from wills, are often dismissed because the trustee is able to successfully argue the plaintiff is suing the wrong party. Ziino v. Baker was a recent case concerning a trust created by a settlor who subsequently died. The plaintiff had pending claims against the settlor’s estate, and sued the testamentary trust directly rather than suing the probate estate, most likely because the majority of the assets were held in the trust. The trustees moved to dismiss the complaint on the grounds that Florida law prohibits a creditor from bringing a direct action against a trust or its trustees, if that action is dependent upon the individual liability of the settlor.Can You Sue a Spendthrift Trust Because the Trust's Beneficiary is Not Paying Child Support?
A spendthrift trust is a trust that contains a spendthrift provision, which generally prevents creditors from reaching assets within the trust. These trusts are allowed because the beneficiary gives away the ability to freely assign his or rights in the trust to others. These trusts are generally used to ensure assets will be safe from a beneficiary’s bad choices or from the event that an unforeseen economic downfall might occur. However, a Florida court will pierce the protective veil of a spendthrift trust when the issue becomes a claim for alimony or child support. In Bacardi v. White, a court allowed the plaintiff to recover owed child support from the defendant’s trust. The court stated that Florida law permits a court to garnish disbursements from a spendthrift trust for the collection for alimony and child support.Can I Sue a Trustee?
Florida law states trustees owe the beneficiaries a duty of loyalty as well as a fiduciary duty to properly administer the trust. The duty of loyalty states that a trust must administer the trust according to the best interests of the beneficiaries and not the interests of the trustee. This means that a trustee cannot self-deal from the trust.
A trustee also has a duty of impartiality, which means that a trustee is to fairly administer the trust to all of the beneficiaries. This duty does not require a trustee to give each beneficiary an equal distribution, but to act according to the trust’s terms.
A trustee also has a duty to properly administer a trust with reasonable care and skill. This means that a trustee usually has a duty to prudently invest the trust’s assets and keep good records.
When a trustee breaches any of these duties a beneficiary may bring a lawsuit against the trustee in a Florida circuit court. In order to win a breach of duty lawsuit, a court typically likes to see that the breach was significant. A court considers a failure to provide information to account as a serious transgression and a court will award the aggrieved party with damages. If a trustee has violated one of his or her duties, or the trust refuses to give over funds to pay for a child support obligation, you may be able to successfully sue a trust or its trustees. For more information contact our office today at 904-685-1200.