What is “Court Supervision” of a Trust?

COURT SUPERVISION REFERS TO A PROBATE COURT OVERSEEING TRUST PROCEEDINGS

Although many inter vivos trusts are designed to avoid probate and other proceedings involving the court after the settlor’s death, there are circumstances in which the probate court will (and in some cases, must) oversee the administration and handling of a trust.

“Court supervision” refers to a situation where a court is involved in, and overseeing, certain actions and proceedings. Courts commonly supervise testamentary trusts and other trusts created after (or upon) a settlor’s death. In these cases, the court’s supervision may last the entire time the trust is being administered, or may be limited in scope, depending on a number of factors, including:

• the wording in the will or other document that created the trust
• the relationship between the trustee and the beneficiaries
• whether or not the trustee requires or requests court supervision (usually, again, due to the terms of the trust)
• whether applicable law requires court supervision

This is not a definitive list; if you think a trust in which you have an interest should–or should not–be supervised by a court, consult a lawyer for an evaluation of the situation and your legal rights.

Courts also may be asked to intervene in, and/or supervise, trust administration; both the trustee and the beneficiaries have the right to request court supervision, or instructions from the court, in certain circumstances. Once again, the court supervision may be limited to a specific issue or more general in scope, depending on the law and the nature of the request.

WHAT KINDS OF SUPERVISION CAN A COURT PROVIDE?

Courts can act, or give instructions, in trust administration either before or after the trustee takes control of the trust estate, and at various times during the administration of the trust. The things a court can do, either on its own authority or upon a request or petition from a party with standing to request court intervention, include:

• Determine whether or not the trust (or any amendment or modification to the trust) is valid
• Appoint a trustee or successor trustee
• Replace a trustee (if allegations of misconduct are proven, or for other reasons)
• Require a trustee to post a bond (to ensure proper completion of the trustee’s duties)
• Affirm the trustee’s powers, and grant the trustee additional powers (within the scope of the law and the trust agreement)
• Order (or affirm) the amount of the trustee’s compensation
• Give instructions to the trustee (which the trustee must follow)
• Rule on claims relating to the trust property (including those brought by third parties who are not named beneficiaries)
• Order the trustee to make payments and distributions of trust property
• Order or permit trust property to be moved to another jurisdiction, or to be used for another purpose
• Make any other orders required to accomplish the purposes of the trust

WHO CAN REQUEST COURT SUPERVISION OF A TRUST?

Any of the following people can file a petition for court supervision of a trust:

• The trustee
• Any named beneficiary
• Any person or entity with a legally-recognized interest in the trust or the estate of the decedent settlor
• The executor or personal representative named in the decedent (settlor)’s will

As you can see, the list is fairly extensive. This is designed to ensure that anyone who has reason to believe a trust is not being managed properly, or would benefit from court instructions or supervision, can request that the court become involved in the administration and management of the trust.

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Disclaimer: THIS ARTICLE IS FOR INFORMATIONAL PURPOSES ONLY, AND DOES NOT CONSTITUTE LEGAL ADVICE OR CREATE AN ATTORNEY-CLIENT RELATIONSHIP BETWEEN THE AUTHOR OR ROSS LAW AND ANY PERSON. Your legal rights and experiences may vary. Never use an online article (including this one) to evaluate your legal rights or claims. Consult an experienced attorney promptly to obtain a personalized evaluation of your claims, potential damages, and the various legal rights and options available to you.

You may lose or compromise your rights if you delay in consulting legal counsel. Most legal claims (and defenses), as well as legal and court procedures, are complicated and fact-dependent. If you believe you have a claim against someone who injured you, a lawyer who represented you in a previous lawsuit, or any other legal claim, consult an experienced lawyer immediately for an evaluation of your individual rights and claims.