Problems with trustees
Trustees, protectors and other fiduciaries are increasingly likely to face legal proceedings. They may be accused of failing to discharge their duties properly, or are being pursued by creditors of the people who set up the trust. Alternatively there could be problems between them and the trust beneficiaries.
We represent beneficiaries of both domestic and offshore trusts. We act in ‘friendly’ disputes, where the court gives guidance on how best to resolve a particular trust or estate problem, or where the court needs to approve something that is not permitted under the terms of the trust. If the matter cannot be sorted out this way or the parties are ‘hostile’, we prosecute or defend on behalf of our client as necessary.
Withers has been involved in the lead cases where trustees and protectors have been removed, and can advise both sides where this is attempted. In one of Dawn Goodman’s landmark cases, the settlor of a Channel Island trust had appointed as protector a lady who was his financial advisor and friend. However after his death problems arose between the protector and his widow, the main beneficiary. The protector refused to step down unless she was given certain indemnities and costs. We argued that for her to stay would not be in the best interests of the beneficiaries, and would harm the efficient administration of the trust. The Court agreed, removing her without the indemnities she had wanted.
Many of our clients are professional trustees located in offshore trust centers, including the Channel Islands, Cayman Islands and Bermuda, but we also act for trustees based around the world, particularly in the US and UK. In San Diego, Mary F. Gillick has represented many trustees, finding solutions to even the most entrenched problems. ‘Select your attorney carefully, but don’t try to do it alone, especially if you are a family trustee,’ she advises. ‘The way you do things is really critical to how other beneficiaries accept what you do.’
If you have concerns about a trustee, time is of the essence, adds partner Steven Kempster. ‘In many jurisdictions there will be a time limit within which you can bring your claims,’ he explains. ‘If you have some information such as a set of accounts that looks awry, it’s important to start investigating or you may not be able to bring a claim later.’
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