Legal Definitions - internal attack

An "internal attack" describes a situation where a person who is designated to receive benefits from a trust (known as a beneficiary) challenges the continued existence or operation of that trust. The primary goal of such a challenge is for the beneficiary to terminate the trust prematurely and receive their share of the trust's assets directly, rather than having those assets managed by the trustee according to the trust's original terms.

Here are some examples to illustrate this concept:

• Example 1: Young Adult Seeking Control
  A trust was established by grandparents for their grandchild, Liam, stipulating that he would receive the principal of the trust when he turns 30. At age 24, Liam, having successfully started a small business, believes he is mature and financially responsible enough to manage the funds himself. He wants to invest the trust's assets directly into expanding his company, rather than waiting six more years for the trustee to release them. Liam initiates legal action, arguing that the trust's purpose of protecting his inheritance until a later age is no longer necessary or in his best interest given his current circumstances.

  This is an internal attack because Liam, as a beneficiary, is questioning the propriety of the trust's continuance with the explicit aim of terminating it early and receiving the trust assets directly.

• Example 2: Beneficiary Disagreeing with Investment Strategy
  Maria is the sole beneficiary of a trust that provides her with a steady income stream, but the principal assets remain under the management of a professional trustee. Maria, an experienced financial analyst, believes the trustee's investment strategy is too conservative and is not maximizing the trust's growth potential. She wants to take direct control of the trust's principal to implement her own, more aggressive investment plan, which she believes will yield better returns.

  Maria's attempt to gain direct control over the principal by challenging the trustee's ongoing management and seeking to dissolve the trust is an internal attack. Her objective is to end the trust and receive the assets for her own management.

• Example 3: Changing Life Circumstances
  A trust was created to ensure the lifelong care and housing for David, who had specific medical needs requiring him to live in a specialized facility. Years later, David's medical condition significantly improves, allowing him to live independently and manage his own daily affairs. He now wishes to move into his own apartment, manage his own finances, and have direct access to the remaining trust funds to support his new, independent lifestyle, rather than having the trustee continue to pay for the facility he no longer needs.

  David, as the beneficiary, is launching an internal attack by challenging the trust's continued operation under its original terms. He argues that the circumstances for which the trust was established have fundamentally changed, making its continuation unnecessary and restrictive. His goal is to terminate the trust and receive the remaining assets directly.