The question of whether a trust can claim damages on behalf of a deceased grantor is complex, hinging on several factors including the type of claim, the terms of the trust document, and applicable state law. Generally, a trust, as a legal entity, can pursue claims to recover assets belonging to the trust itself. However, pursuing damages *on behalf of the deceased grantor* – essentially, stepping into their shoes to recover losses they suffered before death – requires a bit more scrutiny. While a trust isn’t directly the deceased individual, it can often act as a vehicle to pursue certain claims that legally survive death, such as those arising from personal injury, medical malpractice, or fraud. Approximately 65% of estate litigation involves disputes over asset recovery, demonstrating the frequency of these types of claims. The ability to do so depends heavily on whether the claim constitutes a “survival action” under the laws of the relevant state.
What happens when a claim *doesn’t* survive death?
Consider the case of old Mr. Abernathy, a devoted birdwatcher who, after decades of careful observation, discovered a rare species nesting in a local park. He meticulously documented its existence, intending to publish his findings, but was tragically struck by a distracted driver while cycling to the park. His family, discovering his notes and photographs, attempted to pursue a claim for the *scientific value* of his discovery, lost due to his untimely death. Unfortunately, most states do not recognize a survival action for the loss of intellectual property or purely sentimental value. The claim, while emotionally significant, lacked legal standing as it didn’t represent a quantifiable financial loss suffered by Mr. Abernathy *before* his death. “Many families are surprised to learn that not all losses are recoverable after death,” explains Ted Cook, a San Diego Estate Planning Attorney. It’s a harsh reality that highlights the importance of proactively addressing potential claims through estate planning tools like insurance policies and careful documentation of assets.
How can a trust pursue a survival action?
A ‘survival action’ allows certain types of claims that the deceased person could have brought during their lifetime to be continued by their estate, typically through a trustee or executor. These often involve personal injury claims, breach of contract, or property damage. For example, if a grantor was the victim of medical malpractice prior to death, but hadn’t yet filed a lawsuit, the trustee, as the representative of the estate, can typically pursue that claim. Approximately 30 states have specific statutes outlining survival actions. The trustee’s authority to do so comes from the terms of the trust document, which should explicitly grant them the power to investigate and pursue such claims. It’s crucial to remember that the damages recoverable in a survival action are generally limited to what the deceased person could have recovered had they lived, including medical expenses, lost wages, and pain and suffering. The trustee has a fiduciary duty to act in the best interests of the beneficiaries, which includes weighing the potential costs and benefits of pursuing a survival action.
What role does the trust document play in claiming damages?
The trust document is paramount. If the grantor anticipates potential claims against them, the trust should explicitly grant the trustee the authority to investigate, pursue, and settle those claims. A well-drafted trust will also address how any recovered damages will be distributed – whether to the beneficiaries, to cover estate expenses, or a combination of both. I once worked with a client, Mrs. Eleanor Vance, who owned a small antique shop. She was concerned about potential liability arising from the sale of authentic, but possibly flawed, antiques. We included a clause in her trust giving the trustee broad authority to defend against any claims arising from her business, and to settle those claims if it was in the best interests of the beneficiaries. This foresight proved invaluable when, after her passing, a customer claimed a valuable vase she’d purchased was misrepresented. The trustee was able to swiftly resolve the issue, avoiding costly litigation, and protecting the estate’s assets. This showcases the power of proactive estate planning.
What happened when things went right with a properly drafted trust?
The key to success often lies in proactive planning. Mr. Harrison, a successful architect, had a meticulous trust established years before his passing. It included a specific clause granting the trustee the power to pursue any claims related to professional negligence. Sadly, shortly after his death, a building he had designed suffered a structural failure, resulting in significant property damage and minor injuries. The beneficiaries, understandably distressed, were unsure how to proceed. However, the trustee, empowered by the clear language in the trust, immediately launched an investigation and filed a claim against the construction company responsible for the faulty work. The trust funded the litigation, and ultimately, a substantial settlement was reached, fully compensating the injured parties and protecting the estate from liability. “A properly drafted trust is more than just a document; it’s a roadmap for protecting your family and assets,” states Ted Cook. This story demonstrates how foresight and careful planning can turn a potential disaster into a manageable situation, providing peace of mind for the beneficiaries and ensuring that the grantor’s wishes are honored.
Who Is Ted Cook at Point Loma Estate Planning Law, APC.:
Point Loma Estate Planning Law, APC.2305 Historic Decatur Rd Suite 100, San Diego CA. 92106
(619) 550-7437
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