West End 61 | West End 61 | Getty Images
A portion of this article was published in CNBC’s Inside Wealth newsletter, a weekly guide for high-net-worth investors and consumers. Sign up to receive future editions directly to your inbox.
Trusts are designed to keep wealth out of public view, and inheritance disputes usually take place behind closed doors. But an unprecedented study of hundreds of pending trust cases provides rare findings that shed light on the situations that can send heirs to court.
One of the biggest pitfalls in inheriting wealth is choosing one child to administer a family trust when siblings or other relatives could also benefit, according to an analysis of 640 trust disputes published earlier this month in the Washington University Law Journal.
Christopher Ryan, one of the study’s authors and a professor at the Indiana University Maurer School of Law, said this particular trust setup is “an important recipe for conflict.”
“That arrangement could combine normal sibling rivalry with a true power imbalance,” he told CNBC via email. For example, giving privileges such as discretion over trust distributions to one child can deepen existing feelings among siblings that the parents are playing favorites, he added.
The study identified contentious trust disputes by examining thousands of civil cases scheduled to be filed in San Francisco Superior Court between 2014 and 2020. Mr. Ryan is a co-author of the study with Professors Reed Weisbord and David Horton, professors of law at Rutgers University School of Law and University of California, Davis School of Law, respectively.
Almost a quarter of the disputes investigated involved a descendant beneficiary suing another descendant beneficiary who was also a trustee. Many of the petitioners were brothers, whether related by blood or marriage, but some may have been grandchildren, Horton noted.
Nearly all of the petitions involve revocable trusts, a common tool that allows a successor trustee to manage an estate long after the trustor’s death.
Trusts are often used to avoid the time and expense of probate, but they can draw families into expensive disputes that can last months or years. The average case, including those that were settled, lasted 481 days.
The study found that in 74% of cases, trustees were accused of misconduct, particularly breaches of duty of care or duty of loyalty. In nearly one-third of the petitions, beneficiaries request a detailed accounting of the trust’s finances, which Houghton said is a reflection of beneficiaries’ suspicions that the trustees are mismanaging their funds or defrauding them.
Horton said many of these fights seemed to be driven more by emotion than money. He highlighted the case of the Ma brothers, who spent all of the trust’s cash assets and spent more than five years litigating.
Raymond Ma, who died in 2016, gave his son the right to live in his home rent-free for the rest of his life. The brothers disagreed over whether their son should be accepted as a tenant and took the case to court. In 2024, a judge reprimanded both parties for their excessive litigation, dissolved the trust, and ordered the house sold. Despite the ruling, Raymond Ma’s daughters filed a motion in October 2025 to have their attorney’s fees deducted from their brother’s share of the trust assets.
Horton said the findings suggest that emotions can cloud litigants’ judgment. If the parties refused to settle, those who challenged the trust usually lost. When a case required a formal trial rather than a judge’s decision based on submissions and oral arguments, the odds of a claimant winning or reaching a settlement decreased by 48 percentage points.
“A claimant who is desperate to get everything they want for emotional reasons is less likely to compromise or recognize that their case is flawed,” Horton said in an email.
The study estimated that three-quarters of petitions resulted in settlements. The authors believe that many of the petitions have reached settlements, although the exact percentage is unknown, as approximately one-third of the petitions were withdrawn from consideration without a decision on the merits.
The study’s authors said that to avoid conflict, parents should be willing to have tough conversations and consider an independent or professional fiduciary.
“Death evokes strong emotions,” Horton said. “It may be good practice to explain your estate planning choices to your loved ones while you’re still alive to resolve conflicts.”
Ryan added that parents cannot rely on clauses that seek to thwart legal battles, such as no-contest clauses that disinherit beneficiaries who file legal challenges. He said the validity of the no-contest clause is up to the states.
The study found that 85% of cases that went to mediation ended in a settlement, compared to 47% of cases that did not reach a settlement.
“I’m going to plan for conflict instead of thinking that conscription will solve it,” he said.
