When a family business becomes entangled in a probate or estate dispute, the litigation landscape can look very different from standard commercial litigation. Fiduciary duties to the business, to the estate or trust, and to the beneficiaries can overlap and conflict in ways that are difficult to untangle.

Perhaps a loved one has passed away and you are suddenly facing questions you never anticipated about the future of the family business or your role in it. Perhaps you thought you knew the plan of succession but now that the family member has died, you don’t recognize that plan. Perhaps the person who has taken control of the business isn’t acting fairly. Perhaps you are wondering whether what you were promised is being protected. These disputes are deeply personal.

In Washington, family business conflicts tied to an estate or trust are governed largely by the Trust and Estate Dispute Resolution Act (TEDRA). Below, we explore some common scenarios that occur when a family business becomes complicated by a loved one’s death and the probate of their estate or trust administration.

The Person in Charge of the Family Business Is Also the Personal Representative of the Estate or Trustee of the Trust

A common source of conflict between family members arises when a sibling or other family member who runs the family business is also appointed as the personal representative of the recently deceased family member’s estate, or as the trustee of the controlling trust. This dual role can create a built-in conflict of interest. If that person is refusing to share financial records, business valuations, or other information you are entitled to as a beneficiary, you have legal options. A TEDRA petition can be used to compel them to open the books.

The Succession Plan Is Not What You Thought It Was

Families may spend years negotiating who will take over the family business when the founder retires or passes away. Perhaps that long-ago decided plan was considered a certainty for years, only for a last-minute change by the founder under pressure from a new spouse, a caregiver, or during a period of declining health.

The Business Was Transferred to a Trust and You Feel Ill-Informed

Perhaps upon a family member’s death, the business gets transferred into a trust. When this occurs, questions of competing fiduciary duties can arise, particularly when the trustee is both an owner in the company and a beneficiary of the trust. Perhaps the trustee has exercised the authority to convert or restructure the company. Even if this is a permissible act by the trustee, you may have questions about how your interests in both the business and the trust are being protected.

What the Trust and Estate Dispute Resolution Act May Mean for Your Situation

For families dealing with these kinds of conflicts, TEDRA may offer a streamlined process to navigate your dilemma. If any of the scenarios above sound familiar, contact us with questions. The litigation department at Lasher is equipped with litigators whose experience includes extensive practice in the terrain where complex commercial litigation and complex estate disputes collide.

If you have questions about this, or any trust and estate conflict, the attorneys from Lasher’s Trust & Estates Litigation practice are here to help.