Serving as a trustee is often viewed as a position of trust, responsibility, and honor. In practice, it is one of the most legally exposed roles an individual can assume. Across the United States, trustee lawsuits are frequent, emotionally charged, and costly—even when trustees act in good faith.
Understanding who sues trustees, why trustees get sued, and what triggers fiduciary litigation is essential for anyone serving as a trustee, considering the role, or advising families and professionals involved in trust administration.
Trustee Lawsuits in the United States: An Underreported Risk
There is no centralized national database tracking every lawsuit against private trustees in the United States. Trust litigation is handled primarily in state courts, many disputes settle before trial, and settlements are often confidential. Despite this lack of comprehensive reporting, patterns of trustee litigation are well documented by courts, insurers, and trust-and-estate professionals.
The conclusion is consistent across jurisdictions: trustee litigation is not rare, and it is not limited to bad actors or intentional misconduct.
Who Typically Sues Trustees?
Trust Beneficiaries Are the Most Common Plaintiffs
In the United States, trust beneficiaries are by far the most frequent plaintiffs in trustee lawsuits. These disputes often arise from dissatisfaction, mistrust, or perceived unfairness rather than fraud or intentional wrongdoing.
Common beneficiary claims against trustees include:
- Breach of fiduciary duty
- Failure to provide trust accountings or disclosures
- Favoritism among beneficiaries
- Improper or delayed trust distributions
- Conflicts of interest or self-dealing
Family trustees face heightened risk. When a trustee is also a sibling or close relative, administrative decisions are more likely to be interpreted as personal, escalating family conflict into litigation.
Remainder and Contingent Beneficiaries
Remainder and contingent beneficiaries frequently sue trustees out of concern that trust assets will be depleted before their interests vest. These claims are common in long-term trusts and lifetime support trusts.
Typical allegations include:
- Waste or mismanagement of trust assets
- Excessive trustee fees
- Improper preference for current beneficiaries
Disinherited or Removed Beneficiaries
Disinherited beneficiaries and individuals removed from a trust are another significant source of trustee litigation. These lawsuits are often emotionally driven and may overlap with trust contests.
Common allegations include:
- Undue influence over the trustor
- Violation of the trustor’s intent
- Improper amendments made late in life
- Trustee involvement in drafting or modifying the trust
Co-Trustees and Successor Trustees
Trustees are also sued by other trustees. Successor trustees, in particular, may pursue claims after discovering mismanagement, missing records, or asset losses during a transition.
These lawsuits often involve:
- Failure to safeguard trust assets
- Improper delegation of duties
- Poor or nonexistent recordkeeping
Creditors and Other Third Parties
Although less common, trustees may also face lawsuits from:
- Creditors alleging improper distributions
- Spouses or former spouses asserting fraudulent conveyance or asset-tracing claims
- Interested parties seeking court-ordered removal or surcharge
Why Trustees Get Sued: The Most Common Causes of Action
While each case is fact-specific, trustee lawsuits in the United States tend to fall into predictable categories.
Breach of Fiduciary Duty
Breach of fiduciary duty is the most common allegation against trustees. It can include alleged violations of:
- The duty of loyalty
- The duty of care and prudence
- The duty of impartiality
- The duty to follow the trust instrument
Failure to Account or Communicate
Many trustee disputes begin with requests for information. When trustees fail to provide timely accountings, explanations, or transparency, suspicion escalates and litigation often follows.
Conflicts of Interest and Self-Dealing
Even perceived conflicts of interest can lead to lawsuits. Trustees who benefit personally from trust decisions face increased scrutiny, regardless of intent.
Mismanagement of Trust Assets
Market losses alone do not establish trustee liability, but they frequently trigger lawsuits—especially when combined with inadequate documentation or poor communication.
Delays in Trust Administration or Distributions
Delays in distributions or administration are often interpreted as intentional, negligent, or punitive, particularly in family trust arrangements.
Petitions for Trustee Removal
Petitions to remove or suspend a trustee are commonly filed alongside other claims and are often used as leverage in trust litigation.
The Real Cost of Trustee Lawsuits: Defense Expenses
One of the most overlooked aspects of trustee litigation is that many claims are defensible, yet still financially devastating. Even when trustees ultimately prevail, they may incur significant legal fees, accounting costs, and personal stress.
From a risk-management and insurance perspective:
- Defense costs often exceed damages
- Claims are frequently based on alleged negligence rather than intentional wrongdoing
- Informal administration and poor recordkeeping dramatically increase exposure
What Trustees Should Take Away
Trustee lawsuits are not an anomaly. They are a foreseeable risk inherent in trust administration, particularly for individual and family trustees. Understanding who brings these claims and why they arise is essential to managing fiduciary risk.
Trustees who focus on:
- Clear documentation
- Consistent communication
- Strict adherence to the trust instrument
- Awareness of personal liability exposure
are better positioned to reduce litigation risk and withstand beneficiary scrutiny.
Serving as a trustee means accepting fiduciary responsibility. It should also mean recognizing fiduciary liability and planning accordingly.