Trust disputes can devastate family relationships and deplete trust assets if not handled properly. Charity trustee disputes are also common.
Whether you're a trustee facing challenges to your decisions, are involved in a legal dispute with co-trustees or are a beneficiary concerned about trust management, we have an experienced and specialist team to protect your interests and seek the right resolution.
Family trust disputes
When trust disputes arise, causes include :-
Breach of trustee duties - trustees failing to act in beneficiaries' best interests or exceeding their powers.
Family dynamics - death, divorce, or financial pressure can strain previously stable relationships and expose underlying tensions in how trusts are managed. Poor communication frequently exacerbates these issues, with beneficiaries feeling excluded from important decisions or trustees failing to explain their reasoning adequately.
Investment disputes - challenges to investment decisions or strategy.
Trust administration - conflicts over day-to-day management and costs. Generational differences in expectations about trust management and distribution can create friction, especially in long-running family trusts where younger beneficiaries may have different needs or views from those originally envisaged.
Removal of trustees - applications to replace unco-operative or unsuitable trustees due to breach of trustee duties and/or negligence.
Beneficiary disputes - conflicts between beneficiaries about distributions or trust management,
Trustee duties and breaches
Powers and duties of trustees are likely to be included in any comprehensive and well drafted trust deed. These will be the starting point in assessing trustee conduct. However, statutory duties and case law will still be relevant. These legal duties are fiduciary and include duties to :-
Act in best interests - putting beneficiaries' interests first in all decisions
Exercise duty of care - demonstrating reasonable skill and care in trust administration. The standard expected of a professional trustee, whether lawyer, accountant, IFA or other, is higher.
Act impartially - treat different classes of beneficiaries fairly
Act within powers - make appropriate decisions including investment decisions within powers
Comply with duty to account - maintain proper records and provide information.
Express powers in the trust deed must be exercised in accordance with both the trust deed constraints and underlying fiduciary obligations. Where the trust deed is silent, statutory and common law duties fill the gaps.Even broad discretionary powers must be exercised in line with fiduciary duties
Beach of trustee duties - examples
Self-dealing - trustees benefiting from their position.
Investment failures - making inappropriate or risky investments.
Bias - favouring certain beneficiaries over others.
Inaction - failing to make decisions or take necessary steps.
Poor record-keeping - inadequate accounting or documentation.
Unauthorised delegation - leaving decisions to others.
Exceeding powers - acting beyond trust deed authority.
Conflict of interest
How we can help
Trust disputes often require more than establishing whether a trustee has technically breached a duty. The immediate issue may be getting information about the trust, stopping a disputed transaction or distribution, resolving a deadlock between trustees, recovering money or deciding whether a trustee should remain in control.
An important early part of our advice is proportionality. We will consider the value of the trust, what you are seeking to achieve, the strength of the evidence, likely legal costs and whether there is a realistic route to settlement before recommending litigation.
We act for trustees, beneficiaries and others with an interest in a trust. Depending on the circumstances, we can:
Negotiate a practical settlement – use correspondence, negotiation and mediation to explore solutions such as changes to trustees, agreed distributions, improved reporting or wider settlement arrangements without unnecessary court proceedings.
Review the trust and your legal position – examine the trust deed, variations, letters of wishes, accounts, trustee resolutions and other relevant documents to establish the trustees' powers, beneficiaries' rights and whether decisions can be challenged.
Obtain trust documents and financial information – seek accounts, records and explanations where a beneficiary is concerned about how assets have been managed, invested, transferred or distributed.
Challenge trustee decisions – advise where trustees may have acted outside their powers, failed to consider relevant matters, treated beneficiaries unfairly or exercised a discretion improperly.
Deal with suspected misuse of trust assets – investigate payments, transfers, loans, investments or transactions involving trustees or connected parties and advise on recovering losses where appropriate.
Bring or defend breach of trust claims – assess the evidence and financial consequences of an alleged breach and pursue or defend claims for compensation, restoration of trust property or other remedies.
Resolve disputes over distributions – advise where distributions have been refused or delayed, particular beneficiaries appear to be favoured, or there is disagreement about how trustees should exercise their discretion.
Resolve disputes between trustees – help where co-trustees cannot agree, one trustee is preventing decisions being made or relations have broken down to the point that the trust cannot operate effectively.
Remove or replace a trustee – advise on negotiated retirement or replacement and, where necessary, apply to court for the removal and appointment of trustees.
Protect trustees facing allegations – advise trustees on their duties, evidence and potential personal liability, respond to beneficiary complaints and defend proceedings where allegations are unjustified.
Take urgent court action where necessary – where trust assets or your position are at immediate risk, advise on appropriate applications and protective measures.
Represent you in court proceedings – prepare and pursue or defend proceedings where a negotiated resolution is not achievable.
Why choose us for a trust dispute?
Trust litigation is a specialist area. Our Wills, Trusts and Probate Disputes team focuses on contentious work rather than general private client advice and acts for both beneficiaries and trustees. This gives us experience of the arguments, risks and practical pressures on both sides of a dispute.
Our team is recognised by the Legal 500, with four lawyers ranked, and includes members of ACTAPS – the Association of Contentious Trust and Probate Specialists. The team is jointly led by experienced contentious probate lawyers and acts for clients across England and Wales.
Our experience includes substantial and complex trusts. Recent matters include successfully resolving at mediation a multi-party dispute concerning an £11 million discretionary trust, involving two minors, a cohabitee and a charity, and acting for a trustee in a dispute with a co-trustee concerning a discretionary trust with assets exceeding £2 million.
We focus on the outcome you actually need rather than litigation for its own sake. That may mean obtaining information, securing a distribution, replacing a trustee, recovering losses, defending a trustee's position or finding a negotiated solution that allows the trust to operate properly again.
