One Trustee Child, Suing Siblings: Study Exposes Inheritance Traps

Nearly a quarter of contested trust cases involve one family member suing another who also controls the money. That figure comes from a first-of-its-kind study of 640 trust disputes, published earlier this month in the Washington University Law Review, and it points to one of the costliest mistakes in estate planning: naming one child as trustee when siblings and other relatives also benefit from the trust.

Christopher Ryan, one of the study's authors and a professor at Indiana University Maurer School of Law, called the setup "an important recipe for conflict."

"That arrangement could combine ordinary sibling rivalry with a genuine power imbalance," Ryan told CNBC via email. Giving one child discretion over trust distributions, he said, can deepen preexisting feelings among siblings that a parent played favorites.

Ryan co-authored the study with Reid Weisbord of Rutgers Law School and David Horton of the University of California, Davis, School of Law. The team identified contested trust disputes by examining thousands of civil filings scheduled to come before San Francisco Superior Court between 2014 and 2020.

Many of the petitioners were siblings, whether by blood or marriage, though some may have been grandchildren, Horton noted. Nearly all of the petitions involved revocable trusts, a common tool that lets a successor trustee manage a settlor's property long after death.

The price of a family fight

Trusts are built to keep wealth out of probate and out of public view. They can also draw families into disputes that stretch on for years. The average case in the study, including filings that were settled, lasted 481 days.

In 74% of cases, a trustee was accused of misconduct, most often breach of the duty of care or loyalty. In nearly a third of petitions, beneficiaries demanded a detailed accounting of the trust's finances — a signal, Horton said, that beneficiaries suspected their trustees of mismanaging funds or ripping them off.

Many of these fights appear driven more by emotion than money. Horton highlighted the case of the Mar siblings, who spent their trust's entire cash assets and more than five years in litigation. Raymond Mar, who died in 2016, gave his son the right to live rent-free in his home for the rest of his life. The siblings went to court after disagreeing over whether the son could take in a tenant. In 2024, a judge scolded both sides for excessive litigation, ruled for the trust to be dissolved and ordered the house sold. Raymond Mar's daughters then filed in October 2025 to deduct attorney fees from their brother's share of the trust.

Challengers usually lose

The study found that when parties refused to settle, people who challenged the trust generally lost. Petitioners' odds of winning or reaching a settlement dropped by 48 percentage points if their cases required a formal trial rather than a judge ruling based on filings and oral arguments.

"A petitioner who is hellbent on getting everything they want due to emotional reasons is less likely to compromise or recognize that their case is flawed," Horton said via email.

The authors estimated that as much as three-quarters of petitions resulted in a settlement. The exact percentage is unclear because roughly a third of petitions dropped from the docket without a ruling on the merits, but the authors believed many of those were settled.

Planning for conflict, not against it

To stave off fights, the authors said, parents should be proactive about tough conversations and should consider an independent or professional fiduciary.

"Death brings out strong emotions," Horton said. "It may be a good practice to explain your estate planning choices to your loved ones while you're alive to flush out any conflict."

Ryan added that parents cannot rely on provisions designed to prevent court battles, such as no-contest clauses, which disinherit beneficiaries who raise legal challenges. Their effectiveness depends on the state, he said.

The data backs the mediators: 85% of instances that went to mediation ended in settlement, compared with 47% without it.

"I would plan for conflict rather than assuming drafting can eliminate it," Ryan said.