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A well-designed trust offers a perfect tool for estate planning. It is a private agreement designed to protect assets and bypass the public scrutiny of probate court. In theory, this works because the entire structure relies on the integrity of one person: the trustee.
A trustee has a fiduciary duty, a legal obligation to act solely for the benefit of the beneficiaries. Yet, this arrangement, which operates largely without court supervision, may unfortunately foster an environment where mismanagement, negligence, or even outright embezzlement may occur.
When this happens, there is a stark disconnect between what the person who created the trust (the grantor) intended and the reality the beneficiaries now face. If a trustee fails to honor their responsibilities, the responsibility to correct the wrongdoing falls squarely on the beneficiaries. This is a complicated legal challenge governed by a specific set of laws, primarily the Colorado Uniform Trust Code (CUTC).
As Lakewood trust litigation attorneys, our practice at Colorado Estate Matters, Ltd is dedicated to dissecting complicated trust documents, performing forensic accounting to trace misused assets, and pursuing legal action to restore what was lost. We understand the precise steps required to demand transparency and enforce the terms of a trust as the grantor intended.
If you suspect a trustee is failing their duties, understand your rights and the legal remedies available. Call us today.
Many law firms operate as general practices, handling everything from divorce and personal injury to criminal defense. While this approach works for them, it usually means their attention is divided. When you are facing a breach of trust, you don’t want a jack-of-all-trades; you want a focused legal team that dedicates its practice to the intricate world of estate and trust law.
At Colorado Estate Matters, Ltd, that is precisely what we do. Our firm handles estate planning, probate, and trust litigation. This singular focus allows us to develop a deep understanding of the statutes and legal precedents that may make or break a case—details that a generalist might overlook.
Our team, including attorneys Justin W. Blow, Denise Husa, Lexus Bohan, and Maria C. Boggs, is built on a legacy of relationship-centered legal services.
We handle high-stakes, emotionally charged litigation, but we do so from a warm and inviting office environment, not an intimidating corporate tower. We believe that achieving a successful legal outcome and treating clients with compassion are not mutually exclusive goals.
Our primary office is located at 12600 W Colfax Ave, Suite C-480, making us easily accessible to clients throughout the southwest and southeast Denver metro area, including communities like Wheat Ridge, Golden, and Arvada.
We recognize that mobility is sometimes a challenge, which is why our attorneys are also willing to conduct home visits for those who are unable to travel to our office.
We are committed to providing clear, straightforward, and accessible legal support. When you work with our firm, you can expect:
The objective in trust litigation is to restore the trust to its rightful state and ensure the grantor’s wishes are honored. The law provides several remedies to correct a trustee’s misconduct and make the beneficiaries whole.
One of the most effective remedies is a surcharge. This is a legal term that simply means the court orders the trustee to personally repay the trust for any losses caused by their breach of duty.
If a trustee stole funds, sold an asset for less than it was worth, or made improper investments, a surcharge action forces them to use their own money to cover the damages, plus interest and sometimes attorney fees, as outlined in the Colorado Revised Statutes.
When a trustee has proven themselves to be incompetent, hostile, or dishonest, you may petition the court to have them removed. The court may appoint a successor trustee named in the trust document, another family member, or a professional fiduciary, such as a bank or a licensed private fiduciary, to take over the administration.
In some cases, the problem is not just the trustee’s actions, but the creation of the trust itself. If a trust or an amendment was signed because of undue influence, fraud, or while the grantor lacked the mental capacity to understand what they were doing, a court may declare the trust invalid.
This remedy, known as rescission, effectively voids the document, causing the assets to revert to a prior trust or be distributed through the grantor’s probate estate.
Sometimes, a trustee simply refuses to distribute assets to the beneficiaries as required by the trust. They might offer endless excuses or ignore requests altogether.
Litigation compels the trustee to act. A court may order the immediate distribution of assets that are being unreasonably withheld, finally putting the inheritance into the hands of those who are meant to receive it.
Additionally, if your lawsuit is successful, the court may order the trustee to reimburse your legal fees from their personal funds or have the fees paid from the trust itself. This principle of fee shifting helps ensure that beneficiaries are not forced to pay the entire cost of holding a rogue trustee accountable.
For a deeper look at warning signs that a trustee may be failing their duties, see our guide: 5 Warning Signs of Breach of Fiduciary Duties.
Trust disputes in Colorado are governed by the Colorado Uniform Trust Code (CUTC), a comprehensive set of statutes that outlines the duties of trustees and the rights of beneficiaries. When a trustee violates these rules, the CUTC provides a clear framework for legal action within the Jefferson County court system.
A lawsuit cannot be based on mere suspicion or personal dislike of the trustee. You must have valid legal grounds.
The most common claims include:
To sue a trustee, you must have a direct interest in the trust, known as legal standing. Those who typically may file a claim include:
A trust lawsuit follows a structured path:
A significant factor in any trust dispute is the statute of limitations. In Colorado, the deadline to file a claim is very short. Under C.R.S. § 15-5-1005, a beneficiary may have as little as one year to sue after receiving a report from the trustee that adequately discloses a potential claim. If you wait too long, you might lose your right to hold a trustee accountable forever.
The demographics of areas like Applewood, Green Mountain, and Belmar, which include a significant and aging population, give rise to an increase in cases of elder financial abuse and contested trusts. As individuals become more vulnerable, they may be more susceptible to undue influence, leading to disputes that must be resolved in court.
When a trust dispute arises in Lakewood, the case is generally heard at the Jefferson County Courthouse, located at 100 Jefferson County Parkway in Golden. Our firm is deeply familiar with the local court procedures, filing requirements, and judicial expectations of the First Judicial District. This local knowledge allows us to handle your case efficiently, without the learning curve that an out-of-town attorney might face.
Learn more about the local court landscape in our resource for Lakewood families: For Lakewood Families: A Guide to Avoiding the Jefferson County Probate Court.
One of the most difficult realities for a beneficiary to face is the inherent power imbalance in a trust dispute. The trustee holds the checkbook. This means they use the trust’s own funds to hire lawyers to defend themselves against your claims. Meanwhile, as a beneficiary, you typically must fund the initial stages of the fight out of your own pocket.
This dynamic feels deeply unfair, and some trustees will exploit it. They might use delay tactics, such as refusing to return calls, providing incomplete or confusing financial reports, or blaming administrative delays for inaction. Their goal is to wear you down financially and emotionally until you give up or accept a resolution on their terms.
Trustees rarely admit to their wrongdoing. Instead, you have to watch for the warning signs. Keep an eye out for these red flags:
Do not rely on a trustee’s goodwill once these red flags appear. The only way to level the playing field is through decisive legal intervention. We will petition the court to freeze trust assets, compel a formal accounting, and expose the trustee’s misconduct before they can drain the trust any further.
Yes. In Colorado, a no-contest or in terrorem clause is unenforceable if you have probable cause to bring your legal challenge. If you have a reasonable belief, supported by evidence, that the trust is invalid due to things like undue influence or lack of capacity, the court will likely allow your case to proceed without forcing you to forfeit your inheritance.
Generally, each party pays their own fees initially. However, if we prove the trustee breached their duty, the court has the authority to order the trustee to personally reimburse your attorney’s fees or to have them paid from the trust’s assets. Conversely, a trustee is typically allowed to use trust funds to pay for their legal defense, though a court may later order them to repay those funds if they are found to have acted improperly.
The timeline varies. If trust assets are in immediate danger, we will seek a court order to have the trustee temporarily suspended and a receiver appointed in a matter of weeks. The full process of permanently removing a trustee and litigating a surcharge action to recover lost funds often takes an extended period.
In most cases, yes. Unless the trust document specifically forbids the sale or grants you a right to live there, the trustee generally has the power to sell trust assets. However, they have a strict duty to sell the property for its full fair market value and act in the best interests of all beneficiaries, not just one.
A professional fiduciary is a neutral third party, often a licensed accountant, bank, or private fiduciary, who steps in to manage the trust’s assets when the original trustee fails to fulfill their duties. In a court-ordered removal action, the judge appoints this fiduciary to take over the trust’s administration, ensuring unbiased and professional management that protects all beneficiaries’ interests.
For an overview of what the law requires of trustees, see: Your Trustee Duties: Here’s What You Need to Know.
Do not accept the myth that a trustee holds all the power. They are a servant of the trust, not its master, and they are legally accountable to the beneficiaries they were appointed to protect.
Waiting only allows more time for assets to be spent, evidence to be lost, and wrongdoing to be concealed. Our team in Lakewood is prepared to intervene, demand transparency, and work to restore the assets that were intended for you.
Take the first step toward resolution. Call us today to schedule your free consultation.
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