Q: A revocable living trust with the spendthrift clause...
Is It a Breach of Trust/Breach of Fiduciary Duty,If a Successor Trustee of a Revocable Living Trust files a Summons & Complaint (Complaint & Interpleader Request for Declaratory Relief).Before paying out the Beneficiaries, after receiving an Attorney Fee Lien from one of the beneficiary's former attorneys (that breached a contract with the beneficiary.)... If there is a spendthrift clause in the trust, and the language of the Trust says that the Trustee is to payout to the Beneficiaries "before" any creditors can attach a claim to their inheritance?
And what steps can be taken by a beneficiary to fix this problem, if the Complaint led to a Summary Judgment being granted because the beneficiary didn't know how to properly litigate the case, and didn't have any money to hire an attorney because the trustee withheld all the money from the beneficiary, and the beneficiary lost $150,000. Also, the Trustee never did an inventory of the estate or gave an accounting at all in 4 years.
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- California
- (916) 704-3009
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- Answered
A:
Under California law, a spendthrift clause in a revocable living trust generally protects the trust assets from the claims of a beneficiary's creditors, including attorney's fees owed to a former attorney. However, if the trustee has been presented with a valid and enforceable lien or judgment against a beneficiary, they may have a duty to pay the amount owed from the trust assets.
If the successor trustee breached their duty by filing a Summons & Complaint and failing to pay out the beneficiaries before paying the creditor, they may be liable for breach of trust and breach of fiduciary duty. Additionally, if the trustee failed to perform an inventory or provide an accounting, this may also be a breach of their duties as trustee.
As a beneficiary, you may be able to take legal action to address these issues. This may involve filing a petition in court to remove the trustee, or filing a lawsuit against the trustee for breach of trust and breach of fiduciary duty. You may also be entitled to an accounting of the trust assets and any distributions made.
It's important to work with a qualified attorney who has experience in trust and estate law to understand your rights and options in this situation. An attorney can review the trust documents, advise you on the best course of action, and represent you in court if necessary.
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