If you have been asked to serve as the successor trustee of a trust after the death of the person who created it, you need. One of the most serious risks is the possibility of being sued by a trust beneficiary. In this blog post, I will explain what you should do if you find yourself in this situation and why you should consult an attorney who specializes in probate and trust administration.

Many people who agree to be trustees worry about the time and effort required to manage the trust assets and distribute them to the beneficiaries according to the trust terms. However, they may not realize that being a trustee also comes with a high level of liability. As a trustee, you have a fiduciary duty to act in the beneficiaries' best interests and follow the trust agreement's instructions. If you fail to do so, even unintentionally or in good faith, you may be held personally liable for any losses or damages caused by your actions or inactions.

Moreover, even if you are doing everything right as a trustee, you may still face a lawsuit from a disgruntled beneficiary who is unhappy with your decisions or the instructions the trust maker left behind. Unfortunately, anyone can sue anyone in our legal system, regardless of how strong their case is. Being a trustee can sometimes mean making tough choices that may upset some beneficiaries, even if those choices are consistent with the trust agreement and the law. For example, you may have to sell some assets a beneficiary wanted, pay taxes or expenses that reduce what the beneficiaries ultimately receive, or deny beneficiary requests.

So, what should you do if you receive a threat or a notice of a lawsuit from a beneficiary? The first thing you should do is review the trust agreement carefully. It may contain provisions that can help you deal with the dispute. For instance, it may require that any conflicts be resolved through mediation or arbitration instead of litigation. This can save you time, money, and stress. It may also allow you to use the trust funds to pay your legal fees and expenses. This can protect you from having to pay out of your pocket. It may also include an indemnification clause that shields you from personal liability for any claims arising from your role as trustee.

However, before you take any action or make any statement, you should seek legal advice from an attorney experienced in probate and trust administration. This is because you may have personal liability for any mistakes or admissions you make in responding to the lawsuit. You should not ignore or dismiss any lawsuit threat, but you should also not panic or react impulsively. You should act diligently and professionally and follow the guidance of your attorney.

Being a trustee can be a rewarding but challenging role. You may have to deal with complex legal and financial issues and emotional and interpersonal conflicts. If a beneficiary sues you, you should not take it personally, but you should take it seriously. You should review the trust agreement, consult an attorney, and respond appropriately. By doing so, you can protect yourself and fulfill your fiduciary duty.