Can a trust attorney be held liable for a lying trustee?

Trust Attorney Liability

Generally, a trust attorney is not directly liable for a lying trustee, unless they actively participated in or assisted the trustee in breaching fiduciary duties or committing fraud. Mere knowledge of a breach by the trustee, without active involvement, will not make the attorney liable. 

Liability for Trust Attorneys:
  • Active Participation/Assistance:

    If the attorney actively participated in or assisted the trustee in breaching their fiduciary duties or committing fraud, they could be held liable for damages. This could include things like advising the trustee on how to conceal assets or misrepresent information. 

  • Conflict of Interest:

    If the attorney has a conflict of interest that undermines their ability to act in the best interest of the trust and beneficiaries, they may be held liable. 

  • Negligence:

    If the attorney’s negligence in administering the trust or providing advice leads to losses for the beneficiaries, they could be liable for damages. 

  • Fiduciary Duties:

    Attorneys acting as trustees also have fiduciary duties and can be held liable for breaches of those duties. 

  • Breach of Contract:

    If the attorney breaches their contract with the trustee, they may be liable for damages. 

When an Attorney Might Not Be Liable:
  • Mere Knowledge:

    Simply knowing about a breach of duty by the trustee without actively participating in it will not make the attorney liable. 

  • Nondisclosure:

    While nondisclosure might be morally questionable, the law generally does not prohibit it, and it won’t automatically make the attorney liable. 

  • Trustee’s Actions:

    The primary responsibility for trust administration and the management of trust assets rests with the trustee. 

Key Takeaways:
  • Trust attorneys have a duty to act in the best interest of the trust and beneficiaries. 
  • They are not automatically liable for a lying trustee, but they can be held liable if they actively participate in or assist the trustee in wrongdoing. 
  • Beneficiaries may have legal recourse against the trustee and potentially the attorney if they believe there has been a breach of fiduciary duty or other misconduct.