Can a trust beneficiary sue a trustee for misconduct?

On Behalf of | Jan 28, 2025 | Trust Administration

When a loved one passes away, the last thing on your mind is dealing with legal battles. But what if the person responsible for managing their trust, the trustee, is not doing their job correctly? As a beneficiary, can you take legal action against them?

There are legal avenues against trustee misconduct

Trustees are obligated by their fiduciary duty to administer the trust with the beneficiaries’ best interests in mind. Beneficiaries may have grounds for legal action when they fail to fulfill this duty. Some common reasons for suing a trustee include:

  • Mismanagement of trust assets
  • Self-dealing or conflicts of interest
  • Failure to provide accurate accounting
  • Breach of trust terms
  • Favoritism toward certain beneficiaries

The Uniform Trust Code in Oregon provides specific guidelines for trustee responsibilities and beneficiary rights. Under this law, trustees must act impartially, prudently invest trust assets and inform beneficiaries about the trust’s administration.

If you suspect trustee misconduct, you should first attempt to communicate with the trustee directly. Ask for a comprehensive accounting of the trust’s assets and activities. Document all interactions and keep records of any suspicious transactions or decisions.

You may need to take legal action if the trustee fails to address your concerns. In Oregon, beneficiaries can petition the court to remove the trustee, compel them to provide an accounting, recover damages for breach of fiduciary duty or modify or terminate the trust.

It is important to note that there are time limits for filing a lawsuit against a trustee. In Oregon, you generally have six years after discovering the breach or receiving a report disclosing it to pursue legal action.

Ensuring the trust operates as intended and your interests remain protected

While the prospect of legal action can seem overwhelming, remember that you do not have to face it alone. Working with a qualified trust law attorney experienced is vital. They can guide you through the legal process and help you protect your rights as a beneficiary.