Trust Disputes (Video)

Published date25 July 2023
Subject MatterCorporate/Commercial Law, Real Estate and Construction, Construction & Planning, Landlord & Tenant - Leases, Trusts
Law FirmDMH Stallard
AuthorMs Jenny Ray

What types of dispute arise in relation to trusts and can trustees recover their legal costs in relation to these disputes?

There are three common types of dispute that we often see: trust disputes, beneficiary disputes and third-party disputes.

The obligations of trustees and their prospects of recovering legal costs will vary depending upon the type of dispute they are faced with.

What is a trust dispute?

A trust dispute is a dispute as to the trusts on which the trustees hold the subject matter of the settlement.

There may be a 'friendly' dispute arising out of a situation in which everyone agrees there is a problem which requires a solution. For example, if the terms of a trust are ambiguous a construction summons may be pursued.

Alternatively, there be a claim brought by or on behalf of individual beneficiaries, or potential beneficiaries brought for the benefit of a particular claimant rather than the trust. In this type of dispute, the duty of the trustee is to remain neutral; they cannot prefer one class of beneficiary over another. Provided the trustees take a neutral position and do not actively defend a claim, they are likely to be able to recover their legal costs from the trust. If they do actively defend a claim and it succeeds, they risk being ordered to pay the successful claimant's costs personally.

Explain what a beneficiary dispute is

Beneficiary disputes are those between the trustees and one or more beneficiaries and can relate to any action which the trustees have taken, or have not taken, or which they might take in the future.

For example, a beneficiary might claim...

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