The Have’s are the people named in a Trust document to receive a gift of some type, but they are not receiving it because they are facing a bad Trustee who is not treating the beneficiaries equally, not making required distributions, not giving you information, and using the trust money to hire lawyers to defend themselves.
Let’s discuss the last point first.
Why are bad Trustees allowed to use Trust money to defend their actions?
Well, there’s two reasons really. One, they have the money and you don’t. Whoever has the money will use it for their defense—it’s human nature. Two, there are times when a Trustee is allowed, under California Trust law, to use Trust money to defend themselves. However, and this is an important point, there’s also times when a Trustee is NOT allow to use Trust money to defend themselves. How do you know the difference? A judge will decide that, but only at the very end of the case and only if your case proceeds to trial, which most do not. In other words, it can be very difficult to freeze the Trust assets prior to trial. That means, as a practical matter, the Trustee will probably use Trust money in their defense.
Of course, a good Trustee would not use Trust money to defend themselves unless it was allowed under Trust law. But Have’s aren’t dealing with good Trustees. If they were, there wouldn’t be a problem. Instead, the biggest problem facing Have’s are BAD Trustees. And bad Trustees don’t follow the Trust document, they don’t follow Trust law, and they certainly don’t treat the beneficiaries fairly.
And that is the core of the problem.
The Trustee is the person in charge of the Trust.
They were named to manage the Trust assets. But all too often private people acting as Trustee think they can do whatever they want whenever they want. Nothing could be further from the truth.
Many Have’s come to us and focus on trying to remove the Trustee. If only there was a good Trustee in place, none of the bad stuff would be happening, right? That’s true, but Trustee removal is not so easy. It takes a lot of time, effort, and evidence to remove a Trustee. Afterall the Trust Settlors chose to name this person as Trustee, and most judges do not want to change that without ample evidence of wrongdoing presented at time of trial.
Luckily, Trustee removal is not your only recourse. There are many other legal actions you can take to counteract the effects of a bad Trustee. As part of this series of Trust uses and abuses, we will discuss what action you can take to help neutralize and overcome a bad Trustee if you’re a Have.