Trust disputes

Disputes around trusts can often arise where they have been used in the running and structure of a business or in family related transactions including gifts given in a Will that are to be held on trust. They are as such, often quite stressful and sensitive times as the other parties involved in the dispute can often be business associates or family members.

Trust disputes can be a complex form of civil and commercial litigation in business law; but trust disputes are common and arise all the time.  Aitken Whyte Lawyers’ experienced dispute resolution and commercial litigation team will assist you whether you are a beneficiary, trustee or otherwise involved in a dispute about a trust.

What is a trust – trustees and beneficiaries and trust definition

A trust is basically the holding of property (the trust fund) by a person or company (a trustee of the trust) for the benefit of others (the beneficiaries of the trust). A trust describes the relationship between the trustee, being the legal holder of the property on the one part and the beneficiary, being the person ultimately entitled to the benefit of the property.

There are a number of types of trust, but the most common forms used are discretionary trusts (including commonly referred to ‘family discretionary trusts’), unit trusts, hybrid trusts and testamentary trusts. Superannuation trusts are also a common form of trust.  A trust, unlike a company, is not a separate legal entity.

Trusts can be very useful when setting up businesses or in the running of businesses both from a tax and risk management strategy. They can be used to legally and effectively reduce tax payable of a business venture but also protect assets if unexpected problems occur.

Breach of trust

A breach of trust often involves an act by the trustee in contravention of the duties imposed on the trustee by the trust in excess of the powers given. It could also be where a trustee does not exercise those powers reasonably, in good faith and for the purposes for which they were conferred.

Breaches of trust can include active breaches like intentional, negligent or dishonest acts but also passive breaches due to a trustee’s failure to act. Liability for a trustee’s breach is considered strict liability, meaning it is not dependent on negligence or intention and proof of bad faith or dishonesty is not required. Even where a trustee acts following receiving skilled professional advice does not mean liability can be avoided.

Who can sue?

A beneficiary or co-trustee can bring an action against a trustee for the breach.  In fact, a co-trustee may be obliged to bring proceedings in certain scenarios or themselves be open to an action for failing to act.

Beneficiaries usually are unable to bring actions against third parties to the trust. That is the job of the trustee.

Remedies for breach of trust

A trustee is personally liable to the beneficiaries for the consequences of breaches of trust. Compensation and account of profits are common remedies and can include awards of compound interest or other orders for removal of a trustee.

Here to help

Proper experience in dealing with disputes about trusts is essential. Taking the wrong step can be financially costly and impact on the ultimate goal. Aitken Whyte Lawyers litigation and dispute resolution team will advise you on the proper course to take and commence or defend court proceedings where appropriate to get the orders you need if alternative dispute resolution processes such as mediation does not provide a resolution.

Aitken Whyte Lawyers can assist you with any disputes relating to trusts. Aitken Whyte Lawyers Sunshine Coast are focused on results. Call us for expert and experienced advice to represent you at this important time.

Office Location and Contact Details

Sunshine Coast

Maroochydore
Aitken Whyte Lawyers
11/8 Pikki Street,
Maroochydore Qld 4558
Ph: +617 5408 0655
Fax: +617 3211 9311
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