What Do Families Actually Fight About in Trust Litigation? A New Study Offers Some Answers
A New Study of Trust Litigation Shows That the Fight Is Usually About What the Trustee Did After the Trust Was Created
When families fight over trusts, the dispute is often not about whether a parent had capacity to sign the trust or was improperly influenced into changing it. The fight is more often about what happened afterward: what the trustee did with the money, why property was sold, why distributions have not been made, or why the beneficiaries cannot get information.
A recent law review article provides an unusually detailed look at those disputes. Professors David Horton, Reid Kress Weisbord, and Christopher J. Ryan, Jr. reviewed thousands of court filings and identified 640 contested trust petitions arising from cases in San Francisco Superior Court between 2014 and 2020.
Their findings are striking. Seventy-five percent of the petitions involved the trustee's exercise of administrative duties, allegations of trustee misconduct appeared in 74%, and requests for accountings appeared in 31%. By comparison, challenges to the validity of a trust document appeared in only 23%. David Horton, Reid Kress Weisbord & Christopher J. Ryan, Jr., Trust Litigation, 104 Wash. U. L. Rev. 1 (2026).
The researchers studied California cases, not New Jersey cases. However, the disputes that arose in California mirror the types of disputes that arise in New Jersey and can provide some applicable insight into what often motivates trust litigation in the United States.
The study illustrate that trust litigation is often less about broad allegations of family unfairness and more about specific transactions, records, fiduciary duties, and what a trustee actually did with property entrusted to him or her.
Most of the Disputes Concerned Trust Administration, Not Whether the Trust Was Valid
When people think about inheritance litigation, they often think about a will or trust contest based on incapacity or undue influence. Those cases certainly occur, but the study found that disputes over the administration of a trust were much more common than challenges to the validity of the trust itself.
That makes sense when you consider how a trust operates. Unlike a will that may largely accomplish its purpose through the distribution of property after death, a trust may require a trustee to manage assets, make investments, sell real estate, pay expenses, determine when distributions should be made, and exercise discretion for years.
Every significant decision can potentially become the subject of a dispute. If litigation develops, the important questions are usually what the trust authorized, what the trustee actually did, who benefited from the transaction, what records support the decision, and whether the trust or its beneficiaries suffered a loss.
New Jersey law approaches those questions through both the language of the trust and the trustee's fiduciary duties. The New Jersey Supreme Court has recognized that trustees owe fiduciary duties to trust beneficiaries, and the New Jersey Uniform Trust Code requires a trustee to administer a trust with undivided loyalty and solely in the beneficiaries' best interests. In re Estate of Folcher, 224 N.J. 496, 511 (2016); N.J.S.A. 3B:31-55.
The terms of the particular trust remain critical because the Trust Code contains a number of default rules that may be affected by the governing instrument. For that reason, a trust litigation case should ordinarily begin with the document itself and the specific transaction being challenged, rather than a generalized claim that the trustee acted unfairly.
Disputes Frequently Involved a Trustee Who Was Also a Beneficiary
The identity of the parties in the study was also revealing. Beneficiaries accounted for 62% of petitioners, while more than half of the respondents were serving as both trustee and beneficiary.
The researchers found one particular arrangement with substantial frequency. In 23% of all petitions, one descendant was suing another descendant who was serving as both a beneficiary and trustee, and the percentage increased to 28% among petitions involving trust-administration claims.
There is nothing inherently improper about a parent leaving property to several children while appointing one of them as trustee. In many families, one child may simply be more financially sophisticated, live closer to the parent, or be better situated to deal with the work involved in administering the trust.
The problem is that the siblings no longer occupy equal positions once one of them becomes trustee. The trustee may control the bank and investment accounts, communicate with accountants and other professionals, decide when assets should be sold, pay trust expenses, and determine when distributions can be made.
That difference becomes particularly important when a transaction also affects the trustee personally. A trustee who is also a beneficiary remains subject to fiduciary duties and cannot use control of the trust simply to advance his or her own interests at the expense of the other beneficiaries.
Consider a trust that owns a house. If the trustee sells it to an unrelated buyer after obtaining an appraisal and exposing the property to the market, the documents may largely explain what occurred; if the trustee sells the same property to himself, a relative, or a company in which he has an interest at a disputed price, there is a much more obvious reason to examine the transaction.
N.J.S.A. 3B:31-55 specifically addresses transactions affected by conflicts between a trustee's fiduciary and personal interests. Depending upon the circumstances, a conflicted transaction may be voidable by an affected beneficiary unless one of the statutory exceptions applies.
The study does not establish that appointing one child as trustee causes litigation. The researchers examined litigated matters in one California county and did not compare those cases with the much larger universe of family trusts that presumably are administered without a lawsuit.
What the study does show is that the combination of family relationships, financial interests, and one beneficiary's control over trust property appears repeatedly once these disputes reach court. That is a useful point for both the person choosing a trustee and the family member who later assumes that responsibility.
Financial Records and Accountings Often Determine Whether There Is a Real Case
One of the findings I found particularly interesting is that requests for accountings appeared in nearly one-third of the petitions. That is consistent with the practical problem that often causes a beneficiary to seek legal advice in the first place: the trustee knows what happened to the assets, while the beneficiary does not.
A beneficiary may know that a parent had substantial bank accounts, investment accounts, real property, or business interests when the parent died. The beneficiary may not know the balances, what property has been sold, where the sale proceeds went, how much the trustee has taken in compensation, whether distributions have been made to anyone else, or why administration is taking as long as it has.
New Jersey law generally requires trustees to maintain adequate records of the administration of the trust and to keep trust property separate from their own property. N.J.S.A. 3B:31-64 also makes recordkeeping more than a matter of good practice because those records may later determine whether the trustee can explain what occurred.
The Trust Code also generally requires a trustee to keep qualified beneficiaries reasonably informed about trust administration and material facts necessary to protect their interests. N.J.S.A. 3B:31-67 addresses requests for information concerning the administration of the trust and requests for copies of the trust instrument, although the precise rights in a particular matter depend upon the trust and the applicable provisions of the Trust Code.
In litigation, specific records usually matter far more than accusations about family history. If a beneficiary believes that the trustee took $100,000 from the trust, bank records showing the withdrawal and where the money went give a court something concrete to decide.
The same is true when real estate is involved. An appraisal, listing history, competing offers, contract of sale, closing statement, and evidence concerning the relationship between the buyer and trustee may tell the court far more than competing testimony from siblings about whether the trustee was trying to cheat the family.
Those records are equally important to an honest trustee who has been accused of wrongdoing. A trustee who can produce the appraisal, offers, invoices, bank records, and contemporaneous communications supporting a challenged decision is in a much better position to explain why the transaction was appropriate.
An accounting can therefore do more than report balances. It can identify which transactions actually require an explanation and, in some cases, establish that the beneficiary's initial suspicion was wrong.
What Can a New Jersey Court Do If a Trustee Has Breached a Duty?
The appropriate remedy depends upon what the evidence shows. A case involving missing information presents a different problem from a case involving an imminent sale to an insider or money that has already disappeared from a trust account.
If the principal problem is a lack of information, the immediate objective may be an accounting or production of records. If the trustee is about to transfer a significant asset under questionable circumstances, preserving that asset may be more important than attempting to recover damages after the transaction is completed.
New Jersey's Trust Code gives courts broad authority to address those different circumstances. N.J.S.A. 3B:31-71 permits a court addressing an actual or threatened breach of trust to compel the trustee to perform a duty, enjoin a breach, require payment or restoration of property, order an accounting, appoint a special fiduciary, suspend or remove the trustee, reduce or deny compensation, and in appropriate circumstances trace and recover improperly transferred trust property.
A beneficiary, settlor, or co-trustee may also seek removal of a trustee under N.J.S.A. 3B:31-51. While a removal application is pending, or instead of removal, the court may enter appropriate relief to protect the trust property and the interests of the beneficiaries.
Removal, however, should not become a substitute for identifying the actual problem. In Wolosoff v. CSI Liquidating Trust, 205 N.J. Super. 349 (App. Div. 1985), the Appellate Division explained that hostility between a trustee and beneficiary may justify removal when it materially interferes, or is likely to interfere, with proper administration of the trust.
That distinction is particularly useful in family litigation. A Probate Part judge ordinarily does not need to decide which sibling caused decades of family animosity; the more important questions are whether the trustee breached a duty, failed to account, placed trust property at risk, engaged in an improper conflict, or otherwise can no longer administer the trust properly.
If the problem is urgent, the timing of the application may matter just as much as the ultimate relief sought. A beneficiary who learns that trust property is about to be sold, transferred, withdrawn, or dissipated may need to consider whether the property should be preserved while the underlying dispute is decided.
A trustee who has caused a financial loss may also face personal financial liability. N.J.S.A. 3B:31-72 generally measures damages by the greater of the amount necessary to restore the trust property and distributions to the position they would have occupied without the breach or the profit made by the trustee because of the breach.
The important point is that the remedy should follow the proof. Before deciding that a trustee should be removed, restrained, or surcharged, it is usually necessary to determine what happened to the property, what the trust required, and what evidence supports the requested relief.
The Study Also Offers a Practical Lesson for Trustees
Trust administration often becomes unnecessarily difficult when a family trustee handles everything informally. A trustee may assume that extensive explanations are unnecessary because the beneficiaries are brothers, sisters, nieces, nephews, or other relatives, but that informality can become a significant problem after a transaction is questioned.
A trustee who later has to defend a decision is in a much better position if the relevant documents already exist. If real estate was sold, the trustee should be able to produce the appraisal, offers, contract, closing documents, and records showing what happened to the proceeds.
The same principle applies to delays and distributions. If a distribution cannot yet be made because taxes remain unresolved, property must be sold, a claim is outstanding, or a closely held business needs to be valued, documenting and explaining that issue can prevent a legitimate administrative delay from looking like unexplained withholding of a beneficiary's inheritance.
Potential conflicts deserve even greater care. If the trustee is considering a transaction in which the trustee, a family member, or an affiliated business has an interest, the conflict should be evaluated before the transaction occurs rather than addressed for the first time after litigation has started.
The point is not to create documents merely to create a paper trail. It is to make sure that significant decisions can later be explained from the contemporaneous record rather than reconstructed from memory after the family is already in court.
Many of the Trust Disputes in the Study Ultimately Settled
The researchers also found a substantial relationship between mediation and settlement. Of the 145 filings that went to mediation, 123, or approximately 85%, settled.
The authors appropriately caution that those numbers do not prove that mediation itself caused the settlements. Parties willing to participate in mediation may already be more willing to compromise than parties who refuse to do so.
Trust litigation nevertheless can present settlement options that are broader than a simple payment of damages. The parties may be able to agree on an accounting, the sale or division of property, future distributions, resignation or replacement of the trustee, trustee compensation, or the treatment of a disputed transaction.
New Jersey law also expressly permits interested persons, subject to statutory limitations, to resolve certain trust issues through nonjudicial settlement agreements. N.J.S.A. 3B:31-11 identifies matters that may include approval of an accounting, directions concerning trustee conduct, resignation or appointment of a trustee, compensation, and trustee liability.
Some cases still require discovery, emergency relief, or a judicial determination because the parties cannot agree on what happened or what should be done. Even in those cases, developing the financial evidence early usually improves both the litigation and the possibility of a sensible resolution.
What the Study Tells Us About New Jersey Trust Litigation
The study does not tell us how frequently trusts lead to litigation in New Jersey or how often New Jersey trustees breach their duties. It does provide unusually useful evidence about the kinds of issues that appear once a trust dispute actually reaches court.
Most of the petitions the researchers reviewed concerned administration rather than an attempt to invalidate the trust. Allegations concerning trustee conduct were common, requests for accountings were common, and disputes frequently involved a trustee who was also a family member and beneficiary.
Those findings point back to what generally matters when a New Jersey trust dispute is evaluated. The starting point should be the language of the trust, the transactions that are actually disputed, the financial records supporting those transactions, the information provided to the beneficiaries, and the relief the evidence will support.
For a beneficiary, the case usually becomes stronger when a generalized concern can be reduced to an identifiable transaction and supporting evidence. For a trustee, the defense usually becomes stronger when the records establish what was done, why it was done, and where the trust property went.
Frequently Asked Questions About New Jersey Trust Litigation
Can I Take Legal Action Against My Sibling If He or She Is the Trustee?
Potentially, depending upon what occurred and what the trust provides. A family relationship does not reduce a trustee's fiduciary obligations, and being both trustee and beneficiary does not give the trustee unlimited authority to favor his or her own interests.
A specific disputed transfer, unexplained use of trust funds, refusal to provide information required by law, or transaction involving the trustee personally presents a substantially different issue from a generalized claim that the siblings do not trust one another. The documents and transactions should be reviewed before determining whether litigation is warranted.
Does a New Jersey Trustee Have to Provide Information to Beneficiaries?
The New Jersey Uniform Trust Code generally requires trustees to keep qualified beneficiaries reasonably informed about trust administration and material facts necessary to protect their interests. N.J.S.A. 3B:31-67 also addresses requests for information concerning administration and requests for copies of the trust instrument.
The precise information that must be provided in a particular matter can depend upon the beneficiary's status, the trust language, and other provisions of the Trust Code. A beneficiary who believes that information is being improperly withheld should therefore review those issues before assuming either that everything must be disclosed or that the trustee can refuse to provide anything.
Can a New Jersey Court Remove a Trustee?
Yes, when the statutory grounds and facts support that relief. N.J.S.A. 3B:31-51 permits a settlor, co-trustee, or beneficiary to seek removal and also permits the court to enter protective relief while the request is pending.
Removal remains a fact-sensitive remedy rather than an automatic response to family conflict. The stronger application ordinarily focuses on the effect of the trustee's conduct or conflicts on the administration of the trust rather than simply establishing that the parties dislike or distrust one another.
Can a Court Act Before Trust Assets Are Lost?
Yes, when the evidence and applicable standards justify immediate relief. New Jersey trust law permits courts to address threatened as well as completed breaches, and available relief may include an injunction, suspension of a trustee, appointment of a special fiduciary, or another order tailored to protect trust property.
Timing matters when a closing, transfer, liquidation, or withdrawal is imminent. If later relief may not adequately protect the property or the beneficiaries' interests, the court may need to be asked to preserve the status quo before the transaction occurs.
Evaluating a New Jersey Trust Dispute
Kemeny, Ramp & Renaud, LLC represents beneficiaries, trustees, and other interested parties in New Jersey estate and trust litigation, including disputes involving accountings, fiduciary duties, trustee removal, conflicted transactions, and the preservation or recovery of trust assets. Our approach is to identify the governing documents, determine what actually occurred, develop the financial and other evidence, and then evaluate the remedy that the facts support.
