Can You Sue a Trustee of a Trust?

You're a beneficiary of a trust. Money that's supposed to come to you. And the trustee — the person in charge of it — isn't distributing it. Or they're spending trust money on things that don't make sense. Or you simply don't trust the numbers anymore.

So, can you sue them?

Short answer: yes, you can. But here's what almost nobody understands going in — not every disagreement with a trustee is something a court will act on. There's a very specific legal line between "I don't like this decision" and "this decision breaks the law." Knowing where that line is changes everything about whether a lawsuit will actually work.

This article is for educational purposes only and is not legal advice. Every trust and every situation is different.

What a Trustee Is Legally Required to Do

A trustee isn't just managing money. The law puts them under a specific legal obligation called a fiduciary duty — one of the highest legal standards there is.

In plain terms, fiduciary duty means the trustee has to act in the best interests of the beneficiaries, not their own interest, and they have to follow the terms of the trust document. When a trustee violates that duty, it's generally called a breach of fiduciary duty — and that's the legal basis for suing them.

What Does a Breach of Fiduciary Duty Actually Look Like?

A few common examples of a breach include:

• Mismanaging trust assets — making reckless investments, or simply failing to manage the assets at all

• Self-dealing — using trust money or property for the trustee's own benefit

• Failing to distribute assets according to the trust's instructions

• Failing to keep beneficiaries reasonably informed, or refusing to provide an accounting of what's happened with the trust's money

• Playing favorites among beneficiaries when the trust doesn't call for that

  
  

The Misconception: Disagreeing With a Decision Isn't the Same as a Breach

Trustees are usually given some discretion — the ability to make reasonable decisions within the boundaries the trust sets. If a trustee makes a conservative investment choice you wouldn't have made, that's not necessarily a breach.

If a trustee refuses to distribute money the trust document clearly says should go to you, though, that's a very different story.

A Real-World Comparison

Say Marcus is a beneficiary of his late father's trust. The trustee — his father's business partner — has been managing the trust for two years. In that time, Marcus notices the trustee bought himself a boat, and trust account statements show unexplained withdrawals. When Marcus asks for a full accounting, the trustee stalls, then refuses.

That's not just Marcus being unhappy. That's self-dealing, a failure to account, and potentially mismanagement — all recognized grounds to take legal action.

Compare that to Marcus's sister, in a different trust, who's frustrated that the trustee is being cautious and only distributing a small amount each year, even though the trust document actually gives the trustee that discretion. She doesn't like it. But the trustee is doing exactly what the document allows. That's not a breach — that's just a decision she disagrees with.

Same emotion — frustration with a trustee. Very different legal footing.

So, Can You Sue a Trustee?

Generally, yes — but only when you can point to an actual breach of their legal duties, not simply a decision you wouldn't have made yourself.

If a trustee has engaged in self-dealing, mismanaged assets, refused to provide an accounting, or failed to follow the trust's clear instructions, a beneficiary typically has legal grounds to take action. That action can include:

• Petitioning the court to compel an accounting

• Asking the court to remove the trustee

• Seeking compensation for losses the breach caused

Whether a specific situation actually rises to that level depends entirely on the facts — what the trust document says, what discretion it gives the trustee, what actually happened, and what state you're in. This is general information, not an evaluation of your situation. Only an attorney who has reviewed the trust and the specific conduct involved can tell you whether you have a claim worth pursuing.

Trust Your Instinct — Then Get a Clear Answer

If something about how a trust is being handled doesn't sit right with you, that instinct is worth taking seriously — and you don't have to sort out whether it's a real legal issue on your own.

This article is for educational purposes only and is not legal advice. If you'd like to understand how the law may apply to your situation, the attorneys at Woodbury & Ybarra offer free consultations. Mention this article to receive your free consultation.

Visit www.woodburyandybarra.com or call 385-230-7770 to schedule your consultation today.

This article is for educational purposes only and does not constitute legal advice.

Frequently Asked Questions

Can a beneficiary sue a trustee? Yes, generally — but only when there's an actual breach of the trustee's legal duties, such as self-dealing, mismanagement, or failing to follow the trust's instructions, not simply a decision you disagree with.

What is a breach of fiduciary duty? A breach of fiduciary duty occurs when a trustee fails to act in the beneficiaries' best interests or fails to follow the trust document — for example, through self-dealing, mismanaging assets, or refusing to provide an accounting.

Can I sue a trustee just because I don't agree with their decision? Not necessarily. Trustees are usually given discretion to make reasonable decisions within the boundaries the trust document sets. Disagreeing with a judgment call isn't automatically a breach unless it violates the trustee's legal duties.

Can a beneficiary force a trustee to provide an accounting? Yes, a beneficiary can typically petition the court to compel an accounting if the trustee refuses to keep them reasonably informed or won't disclose what's happened with the trust's money.

What can a court do if a trustee breached their fiduciary duty? Depending on the situation, a court may compel an accounting, remove the trustee, or order compensation for losses the breach caused. The specific outcome depends on the facts of the case.