Establishing a trust can be an ideal way to protect assets such as your car, bank account or Maryland home. However, if the trust is created in bad faith, it may be possible to have it dissolved. For instance, if it was created just days before filing for divorce, a judge may invalidate the document.
Taking legal action against a trust
Typically, you can take legal action against trusts themselves. However, you can take legal action against a trustee. A trustee is the person who manages assets on behalf of the testator, and this person may take other actions depending on the scope of the trust. Whether you will obtain a favorable outcome in a case depends on several factors, including whether the defendant oversees a revocable or irrevocable trust.
Why the type of trust matters
A revocable living trust may be easier to pierce through because the trustee and the trust’s creator are often the same person. Therefore, the person who you are suing typically exerts a level of control over the assets held inside of it. An irrevocable trust offers more protection because the trustee is someone other than the person who created the trust. Therefore, after the assets are transferred to the trust, the defendant has little to no control over them.
Taking legal action against a trust may enable you to obtain cash, the rights to an asset or other forms of relief. The trust document itself, defendant statements or other forms of evidence may be used to help you obtain the best possible outcome in your case. A financial advisor may be able to help you learn more about whether suing a trust is in your short or long-term interest.