A trust is a legal relationship in which a trustee holds property for beneficiaries, who are the individuals benefiting from the trust. The trustee must abide by the terms of the trust to manage property and distribute it to the beneficiaries. The person who creates a trust is known as the settlor, or grantor. The settlor can also serve as the trustee, naming a successor trustee who will take over for him following his death. Alternatively, the settlor can name someone else to serve as the trustee at the time he creates the trust. A trustee owes certain duties to the beneficiaries -- and the beneficiaries have a right to enforce the terms of the trust and hold the trustee in breach of his duties if he is performs any wrongful acts or omissions that affect their interests.
To enforce a trust, a party must have standing. Only the settlor and beneficiaries have standing to enforce a trust. There is an exception for charitable trusts. Because charitable trusts are created for the benefit of the public, the state attorney general also has standing to enforce a charitable trust. Further, for a beneficiary of a charitable trust to have standing, the beneficiary must be specifically identified in the trust. Potential future beneficiaries generally do not have standing.
A trustee owes several fiduciary duties to the beneficiaries. Fiduciary duties are essentially legal duties, or legal obligations. The most common fiduciary duties include a duty to manage the trust according to the settlor's instructions, duty of good faith and duty of loyalty. The duty of loyalty requires that the trustee act in the best interest of the trust and beneficiaries. For example, profiting from the trust at the expense of the beneficiaries would be a breach of the trustee's duty of loyalty. The duty of good faith is an umbrella term encompassing a host of responsibilities. In general, it means that the trustee must act with due care in managing the trust. For example, investing trust property unwisely might result in a breach of the trustee's duty of good faith.
To enforce a trust, a person with standing must petition the appropriate court. A petition is a formal written application asking the court to take a particular action. The rules of procedure governing this specific process vary by jurisdiction. However, keep in mind that all jurisdictions have a statute of limitations to bring a claim. For example, in California, a beneficiary may not commence a proceeding against a trustee more than three years after discovering the act or omission giving rise to the claim.
In general, the court will award a remedy as it sees fit. Common remedies include relief to compel an accounting of the trust by the trustee, an order requiring the trustee to give assurances to ensure the proper distribution of the trust assets, an order compelling distribution of all or some of the trust assets available for distribution, money damages for a trustee's breach of his fiduciary duties, or an order terminating the authority of the trustee.
Thomas King is a graduate of the University of Pittsburgh School of Law where he served as managing editor of the "Pittsburgh Journal of Environmental and Public Health Law." He currently lives in Aberdeen, Washington where he writes and practices law.