Must be “interested person” Beneficiary Trustee Attorney general (charitable trusts) Others affected by the trust?
Must determine under state law the parties who MUST be involved with the lawsuit. Note that you may wish to involve other parties to get them bound to the judgment.
Must bring lawsuit in a court which has jurisdiction over the trust. Inter vivos vs. testamentary? Amount involved? Court system in state Court system in county
Must bring lawsuit in county with proper venue. County of trustee’s residence? County of situs of trust administration? County of beneficiary’s residence? County where breach occurred? Different for individual and corporate trustees? Different for multiple trustees?
Can an order binding a party bind non- parties? Bind guardian, bind ward (minor or incompetent)? Bind parent, bind minor child? Bind person with substantially similar interest to a party if no conflict of interest.
Trust Property 1. Trustee embezzles $1,000 2. Trustee uses money to pay secured/priority creditor Trustee’s Secured/Priority Creditor 3. Beneficiary is subrogated to rights of “paid off” creditor 4. B uses rights of creditor against Trustee and Trustee’s other creditors
A creditor with the right to recover from several funds/items, must first resort to fund/item not subject to the rights of another creditor who has recourse to only one of the funds/items.
Example Trustee personally owns two assets: Asset A = $10,000 Asset B = $6,000 Beneficiary has claim for $5,000 against Asset A via subrogation due to Trustee’s embezzlement; no claim against Asset B Creditor has priority claim against both assets totaling $10,000.