A breach of trust is a violation of a duty a trustee owes to a beneficiary. It can result in the payment of money damages. If it is a serious breach of trust, it may result in the Court removing the trustee. How long does a beneficiary have to file a breach of trust and/or breach of fiduciary lawsuit against a trustee? Under Section 456.10-1005.3, RSMo there is generally five (5) years to file suit after the first of the following: (1) the removal, resignation or death of the trustee, (2) the termination of the beneficiary’s interest in the trust, or (3) the termination of the trust. This is generally consistent with the time limits for other claims in Missouri.
There is a, however, a wrinkle with the time limit to bring a breach of trust action in Missouri. A beneficiary only has one (1) year to file a breach of trust/fiduciary suit against the trustee if the beneficiary, or the beneficiary’s representative, was sent a report that adequately disclosed the existence of a potential claim for breach of trust. For the report to be valid, it must refer to the time for commencing a proceeding with respect to any potential claim adequately disclosed on the report. In essence, the, the trust code permits the trustee to accelerate the limitations period by sending out the report and telling beneficiaries that if they have any disputes they have one year to pursue litigation. This is often a preferred outcome to waiting five (5) years with a potential lawsuit hanging over a trustee’s head.
From a trustee’s perspective, there is generally a duty to inform and report regarding the statute of the trust’s administration. It is prudent, therefore, to send out notices as frequently as possible if there is concern. From a beneficiary’s perspective, it is extremely important to review communications and documents received from a trustee to ensure that your rights are adequately protected.