Most of the time, trust management follows some fairly predictable patterns – until some conflict arises. Trustees can then end up facing difficult dilemmas that require additional legal clarity.
In these situations, either the trustee or the beneficiaries of the trust can use a petition for instruction to get that much-needed direction. A petition for instruction is a formal request to the court asking for specific guidance on how to interpret a trust’s provisions or proceed with a specific aspect of its management.
When might a petition for instruction be necessary?
Trust documents are usually carefully drafted, but even the most careful plans can go awry. Here are a few common reasons a petition for instruction might be warranted:
- Ambiguous language: If the language in any part of the trust is unclear or open to multiple interpretations, the petition could be used to clarify the intent of the trust’s grantor so that the trustee knows the proper course of action to take.
- Conflicting provisions: Sometimes provisions in the trust can end up in conflict with each other, leaving the trustee in a no-win situation. A petition for instruction can clarify with provision has precedence.
- Reduced administrative liability: If a trustee is in conflict with the beneficiaries on how to handle some aspect of the trust’s administration, such as when they need to sell family property or cash in some investments, the petition makes it possible for the trustee to seek the court’s approval and reduce their own liability.
- Changes in the law: Tax regulations and trust laws change over time, and that can affect how a trust should be managed. If the trustee has any doubt about their responsibilities, the petition can confirm that they are in compliance with the law and still upholding their fiduciary duties.
Once a court issues instructions, the decision becomes legally binding on the trustee – and that can halt any disputes with the beneficiaries moving forward and protect the trustee’s reputation and interests.