A notion frequently presented by beneficiaries of a trust or an estate is that the trustee or executor is doing something unlawful if the beneficiaries are not treated “equally.” Although equality between or among beneficiaries appears to be a readily understandable concept, it is not the same as being entitled to receive an equal share of a trust or an estate. In the context of beneficiary disputes, the claim is not complicated to summarize: if the trustee (or executor) did not treat the beneficiaries equally, the fiduciary must have breached a duty. This argument has a surface appeal, but it is not necessarily consonant with the law.
Trustees and executors often face zero-sum situations, particularly without express instructions from the governing trust instrument or will. For example, two or more beneficiaries may wish to select the same tangible personal property. Alternatively, two or more beneficiaries may wish to receive the same real property. Some beneficiaries simply object to other beneficiaries receiving any specific property, or anything in-kind, even if such a transfer would not result in a shortfall of benefits or property distributable to the other beneficiaries.
There are guideposts in the law that may help pave the fiduciary's way out of such a quagmire. For instance, Virginia’s Trust Code, substantially modeled on the Uniform Trust Code that is now the law in a majority of states, focuses on the legal concept of impartiality. The concept of impartiality is different from the commonly understood notion of equality. Impartiality by a trustee focuses on equitable treatment: in investing, managing, and distributing the trust property. As a legal construct, impartiality is also qualified, and may require more than the rote exercise of the fiduciary's taking identical actions for each beneficiary.
The laws governing trusts and estates generally permit fiduciaries to reach an appropriate resolution even in the case of an apparent impasse. These legal guideposts are not always readily discernable, however, and distinctions can become easily blurred when arguments are made on the basis of surface appeal, including those asserting a lack of equality. A trustee or executor challenged by such arguments should either involve legal counsel early in the process of a trust's or estate's administration to prevent such claims from being litigated needlessly or seek counsel with relevant experience in the event that litigation arises.
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