When can a beneficiary sue a trustee?
When can a beneficiary sue a trustee? Assistant at Law Assistant at Parklin Law When a trustee neglects or mismanages a trust, it can ruin their beneficiaries' financial security. But what can the beneficiary do about it? Can they sue the trustee for damages? Is there a statute of limitations on filing the lawsuit? A common misconception is that beneficiaries have no legal recourse when an estate is mismanaged by a trustee. However, there are two ways that a beneficiary may be able to take action against an estate's trustee (or co-trustee). The first way is if the trust gives the beneficiary explicit authority to take legal action against the trustee. Some trusts give the beneficiary this explicit authority by giving the beneficiary power to remove and replace trustees. Other trusts give explicit authority to beneficiaries to sue a trustee in violation of his or her fiduciary duty. The second way is if there is a fiduciary duty between the parties. Some states have establishe...