Trusts can be powerful estate planning tools, but even the most powerful tools will be challenged from time to time.
When billionaire Richard Mellon Scaife passed way last July his children expected to find at least $90 million in a family trust fund that had once been worth $210 million. Instead, they found that the trust had been depleted and there was no money left.
Now, the children, Jennie and David Scaife, allege that their father improperly used the funds in the trust to keep his newspaper running.
As Forbes reports in "Late Mellon Billionaire's Kids Say Dad Misused $210M Trust Fund," the children are suing their father's estate. The estate's executor denies the allegations and has vowed to fight the suit.
This is a family that was recently ranked as the 19th richest family in the United States. However, you do not have to be that wealthy to face similar issues in your own family.
When there are disagreements over how the funds in a family trust should be used, it is very normal for families to fight in court. For this reason, trusts should be as specific as possible about how the money is used and trustees need to follow the guidelines set forth in the trusts.
Trustees can be held personally liable if a court finds they have acted improperly. These issues can best be avoided by working with an experienced estate planning attorney to help design and administer a family trust.