What is a Trust?
A business entity, such as a corporation or LLC, is a paper person—a “thing” in its own right. In Minnesota, a trust is not. A trust is not a “thing” or a person under the law. A trust is a property relationship involving three roles: settlor, trustee, and beneficiary. (One person can serve in multiple or even all three roles.) A settlor gives legal title to property to a trustee, who holds the property in trust for the benefit of a beneficiary. There can be more than one settlor, more than one trustee, and more than one beneficiary.
Can you sue a trust?
You can sue a trustee. You can start a court case involving trust property as you can any other property. You can’t, however, sue a relationship such as a trust. In casual speech, people may refer to “the trust” having an attorney to mean that the trustee has an attorney, much in the same way one can say, “Minnesota won the game” to mean “A Minnesota team won the game.” Technically speaking, however, a trust can’t have or do anything because a trust isn’t a “thing” or person.
Can a trust sue in its own name?
A trustee can sue a third party in the name of the trustee, as in Jane Doe as Trustee of the John Doe Trust v. Richard Roe. A trustee can also start a court case in the name of the trust for a variety of reasons, as in In the Matter of the John Doe Trust.
When a trust lawsuit involves only the settlors, trustees, and/or beneficiaries, the lawsuit is brought in the name of the trust. Among other things, a court case involving a trust may relate to the trust agreement, such as a dispute over who has an interest in the trust, a dispute over the nature and extent of the beneficiaries’ interests, a dispute over the terms of a trust, a request to deviate from the terms of a trust, or a request to terminate a trust.
A court case involving a trust may also relate to the trustee, such as a dispute over an action taken by a trustee, a request for a trustee to account, a dispute over a trustee’s accounting, a dispute over fees to be charged against the trust, a request to remove a trustee, a dispute over who should be the trustee, or a request that a trustee redress a breach of trust. Trust cases often involve disputes over trust funds, real property, or other assets. Issues that often arise in lawsuits against trustees include breach of fiduciary duties, conflicts of interest, and self-dealing.
An Attorney Can’t Represent a Trust
The common misunderstanding that a trust is an entity leads to another common misunderstanding: thinking that the trustee’s attorney represents the trust or the beneficiaries. Because a trust is a relationship—not a thing or person—an attorney can’t represent a trust. In Minnesota, a trustee’s attorney represents only that trustee. A trustee’s attorney doesn’t represent the beneficiaries. Only a beneficiary’s attorney represents that beneficiary. In trust litigation cases, different beneficiaries often have different attorneys, and different trustees often have different attorneys. A beneficiary can’t expect representation of their interests by a trustee’s attorney or another beneficiary’s attorney. If you’re a beneficiary with a trust dispute, hire your own attorney.
Families are complicated. Trusts are complicated. Litigation is complicated. Family trust litigation is extra complicated. In a lawsuit involving a trust or trust property, hire a trust litigation attorney.