If a trustee is refusing to pay tuition for a child’s education such as private school, college, university, graduate school, medical school or law school, you may have a recourse depending on how the trust was set up.
The first step is to have your attorney read the trust. Unlike wills that are admitted to probate, trusts are not part of public records. If you don’t have a copy of the trust, as the trustee for a copy. Or perhaps one of the other beneficiaries has a copy they can give you. If you don’t have a copy of the trust and the trustee refuses to provide a copy, we can file a proceeding with the court to compel the production of the trust.
If a trustee is specifically required by the trust to pay the tuition, then we can use the courts to compel the trustee to pay. When a trustee has the power to pay the child’s tuition as a discretionary power, there could be a situation where a trustee and beneficiary are not in agreement, leading to legal conflict.
The clearest and best-written trusts make it easy to tell whether the trustee is required to pay for the child’s education such as private school, college, university, graduate school, medical school or law school. Unfortunately, only a small majority of trusts are clear and well-written. In some cases, language could be interpreted to mean that the trustee must distribute funds in a way to keep the beneficiary up to the standard of living that they used to enjoy, which may or may not mean paying for the tuition. Other trusts may only direct that the trustee uses the funds for things such as medical or emergency expenses. There are other trusts that simply allow the trustee to use their discretion entirely, with no additional guidance as to how. It all depends on the language that the attorney who drew up the trust document used and what was requested by the person who set up the trust.
Even if the trust is set up to leave distributions up to the discretion of the trustee, a trustee still does not have unlimited power when it comes to distributing funds. A trustee cannot simply refuse to distribute discretionary funds for a bad reason or no reason. A trustee still has to act reasonably and fairly when making distributions from the trust, meaning that they can’t simply refuse to pay tuition at either private school, college or graduate school without some sort of good cause. For example, if the trust document says that funds from the trust should be used for educational expenses, it would most likely be found to be unreasonable on the part of the trustee to refuse to pay for the school.
When a trustee refuses to pay for a child’s education, there are a few things that the beneficiary may want to try in order to get the money they feel they deserve. A first step could be as simple as having a New York trust litigation attorney write a demand letter on the beneficiary’s behalf making a demand for distribution of the estate. This could be a simple solution to keep out of court.
If this does not work, then litigation may be the only option. If this is the case, the beneficiary may have to file a suit against the trustee to have the court force them to release the funds.
Call the Law Offices of Albert Goodwin at (212) 233-1233, New York estate, guardianship, wills, trust, Medicaid and probate lawyer, and make an appointment to discuss your trust situation.