Frequently trust litigation stems from a heated dispute between trustees and beneficiaries, or co-trustees who cannot agree on the trust administration, or beneficiaries who cannot agree on their respective rights under a trust instrument, or other disagreements between various parties incident to a trust. When such disputes cannot be resolved amicably by the parties themselves, with or without the assistance of legal counsel, sometimes the only practical recourse is to file suit and let a judge or jury decide who should prevail depending upon the facts, circumstances and evidence.
With this in mind, Ark. Code Ann. § 28-73-201(b) does not mandate continuing court supervision of trusts. Rather, a court may intervene in the administration of a trust whenever it is asked to by an “interested person or as provided by law.” Ark. Code Ann. § 28-73-201(a). Such judicial proceedings involving a trust “may relate to any matter involving the trust’s administration, including a request for instructions and an action to declare rights.” Ark. Code Ann. § 28-73-201(c) (emphasis added).
In sum, occasionally trust-related judicial proceedings do not involve an alleged breach of trust, breach of fiduciary duty, misappropriation of assets, etc. That's a good thing because such disputes---often involving family members fighting over money---can turn into some of the ugliest and most contentious wealth wars imaginable.
Rather, petitions for instructions and requests for declaratory judgments---such as the ones contemplated in Ark. Code Ann. § 28-73-201(c)---are typically less heated because theoretically they involve an innocuous request that the court merely provide instructions or guidance to the trustee or beneficiaries. Perhaps the proceeding stems from an alleged ambiguity in the trust terms, maybe there is a question regarding which beneficiaries are supposed to receive trust income or principal, or possibly the court is simply being asked to declare the rights and obligations of various individuals associated with the trust.
While these matters can still be adversarial in nature, they are usually not the classic battles in which someone is claiming that another party necessarily engaged in intentional fraud or other wrongdoing. Accordingly, when appropriate this type of proceeding should be considered as an option whenever there is a need for court intervention in a situation which does not necessarily rise to the level of a full-blown "divorce on steroids," as we sometimes call the nastiest of the inheritance-related disputes in which we are frequently asked to become involved.
Matt House can be contacted by telephone at 501-372-6555, by e-mail at email@example.com, by facsimile at 501-372-6333, or by regular mail at James, House & Downing, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.