Lake Mary Family Trust Litigation Attorney
Instead of passing down financial assets directly to an individual, such as a bank account transfer, it is generally in the best interest of all parties for the trustor, or grantor, to create a trust. A trust is a method to pass assets to an individual or individuals upon death, though it can also be done during the trustor’s lifetime. The trustee—the party who manages the assets within the trust—has a fiduciary duty to act in the best interest of any beneficiaries. Disputes can arise if the trustee is suspected of fraud or mishandling the trust. Disputes also arise when there are conflicting interpretations of a family trust documents, if there are conflicting opinions on the trustor’s legal capacity if they were elderly at the time of creating or altering the trust, or if the trustor was subjected to undue influence (coercion). These are complex legal matters and you should contact a Lake Mary family trust litigation attorney right away for assistance.
What is a Family Trust?
A family trust is simply a trust that is created to benefit the relatives of the trustor, also called the grantor. Family trusts are used to avoid probate, avoid taxes, protect assets, and sometimes to specify how certain assets should be used. Examples of various types of family trusts include:
- Revocable Trust—A trust that can be altered during the lifetime of the grantor;
- Irrevocable Trust—A trust that, once created, is virtually set in stone and cannot be altered by the grantor after creation.
- Special Needs Trust—A trust created by a parent or legal guardian that sets aside assets for a minor or adult child with special needs, allowing that individual to remain eligible for certain government funded programs, including medicaid and supplemental security income.
- Generation Skipping Trust—In order to avoid estate taxes, some grantors prefer to create (or use in addition to other trusts) a generation skipping trust, in which assets skip past the grantor’s children, and go to their grandchildren instead.
- Testamentary Trust—A testamentary trust is created by the grantor’s will, after their death, and is used to distribute assets to children, spouses, beneficiaries, charities, etc.
- Charitable Remainder Trust—This type of trust can be used by charities to benefit from appreciated assets, including real estate and stock, without incurring a capital gain tax.
Examples of Family Trust Disputes
The greatest threat to estate planning is family conflict, according to a TD Wealth poll and CNBC. Wealthy families tend to have the most problems, as inheritance expectations are often greater than reality. Other issues include spouses with multiple ex-spouses, children from previous marriages, and marriages in which one spouse is much younger than another. In general, poor communication, greed, and a history of family drama increase the chances of a trust dispute. For example, “blended families,” in which a stepparent is a trustee, often see lawsuits started by stepchildren, according to Forbes. A trust can be challenged in court, particularly if it is a DIY trust, when the language is incorrect, if there is evidence of undue influence, the grantor had dementia, or the trustee mismanaged the trust in some way (including incompetence) and violated their fiduciary duty to the beneficiary.
Call Our Lake Mary Family Trust Litigators
If you are in the process of a family trust dispute, whether you are a beneficiary or trustee, it is in your best interest to contact a Lake Mary family trust litigation attorney immediately with the Troum Law Firm, P.A. Call us today at 321-428-2247 to schedule a consultation.