Trust Litigation Attorney in North Carolina

Legal Grounds for Challenging a Trust or a Trustee’s Conduct

North Carolina recognizes several bases for contesting a trust. G.S. 36C-4-406 specifically addresses trusts created or induced by fraud, duress, or undue influence. Courts also consider challenges grounded in the settlor’s lack of mental capacity at the time the trust was executed, material mistake in the trust’s terms, or outright forgery.

Undue influence claims require showing that someone in a position of trust over the settlor used that relationship to substitute their own wishes for the settlor’s. Lack of mental capacity means the settlor didn’t understand the nature of the document, the extent of their assets, or the identity of the people who would benefit. Both arguments frequently depend on medical records, caregiver testimony, and evidence of the settlor’s living circumstances. These are areas where our guardianship experience informs our analysis.

A Trustee’s Fiduciary Duties

When the dispute centers on trustee conduct rather than the trust’s creation, the question is whether the trustee honored the duties the law imposes. Those duties generally include:

• Duty of loyalty: Avoiding self-dealing and acting solely in the beneficiaries’ interests
• Duty of care: Protecting and prudently managing trust property
• Duty of impartiality: Treating current and future beneficiaries fairly
• Duty to inform and account: Keeping beneficiaries reasonably informed and providing accountings of trust assets

A trustee who favors one beneficiary, makes speculative investments, or fails to account for assets may be liable for breach of fiduciary duty, regardless of whether they acted with intent to harm.

How a North Carolina Trust Dispute Proceeds

Trust proceedings in North Carolina are generally initiated before the clerk of superior court. Either party may appeal the clerk’s ruling to a superior court judge, who reviews the record for legal and factual errors. Discovery, depositions, and evidentiary hearings are all possible depending on how contested the facts are.

North Carolina encourages resolution without trial, and many trust disputes are resolved through negotiation or mediation before a judge ever rules. When settlement isn’t possible or appropriate, the remedies a court can order include trustee removal, a full accounting of trust assets, restitution to the trust, or a revised distribution plan. Under the North Carolina Uniform Trust Code, removal is appropriate when a trustee has committed a serious breach, is unfit or unwilling to administer the trust effectively, or when removal otherwise serves the beneficiaries’ interests.