Understanding Laches and Its Limits for Trustees in Virginia

What Is Laches?

Laches is a legal doctrine that bars a claim when there has been an unreasonable delay in asserting a right, and that delay has prejudiced the opposing party. In the context of trusts and fiduciary duties, laches is sometimes raised by trustees or other fiduciaries as a defense against claims of breach by beneficiaries.

Laches and Fiduciary Duty in Virginia

General Rule: Laches Is Not a Typical Defense for Trustees

In Virginia, the law is clear: laches is generally not a defense available to a trustee accused of breaching fiduciary duty—unless the trustee has denied or repudiated the trust, and that denial or repudiation has been clearly communicated to the beneficiary. This principle is well-established in Virginia case law and is designed to protect beneficiaries from losing their rights due to inaction, unless they were put on notice that their rights were being challenged.

Key Virginia Cases

• Wiglesworth v. Taylor, 239 Va. 603: The Virginia Supreme Court held that a fiduciary cannot use laches (or the statute of limitations) as a defense against a trust beneficiary unless there has been a denial or repudiation of the trust, and that has been communicated to the beneficiary.
• Broaddus v. Gresham, 181 Va. 725: The court reiterated that as long as there has been no denial or repudiation of an express and continuing trust, neither laches nor the statute of limitations will bar a beneficiary’s claim.
• Sovran Bank, N.A. v. Jackson, 10 Va. Cir. 352: The court noted that laches does not apply until the trustee has terminated active duties, denied or repudiated the trust, or otherwise committed acts in breach of the trust, and the beneficiary has been notified or is chargeable with constructive notice of such actions. Only then does the clock start ticking on the beneficiary’s obligation to act.

Statutory Framework

Virginia’s statutes reinforce these principles. A beneficiary generally cannot be barred from bringing a claim for breach of trust unless they have received a report that adequately discloses the existence of a potential claim and informs them of the time allowed for commencing a proceeding. If such notice is not given, beneficiaries have up to five years after certain events (such as removal or death of the trustee, termination of the trust, or termination of the beneficiary’s interest) to bring a claim.

The Danger of Relying on Laches as a Trustee

Why Trustees Should Not Rely on Laches

Trustees and other fiduciaries who attempt to use laches as a shield against breach of fiduciary duty claims in Virginia do so at significant risk. Unless they have expressly repudiated the trust and communicated that repudiation to the beneficiary, courts are unlikely to accept laches as a valid defense. This means:

• A trustee who quietly breaches their duty, without clear communication to the beneficiary, cannot later argue that the beneficiary waited too long to sue.
• The law favors protecting beneficiaries, recognizing the inherent power imbalance and the fiduciary’s obligation to act transparently and in good faith.
• Trustees must be proactive in their communication and cannot simply rely on the passage of time to escape liability.

Practical Takeaways

• For Beneficiaries: If you suspect a breach of fiduciary duty, you generally have strong protections under Virginia law. Delay alone, without notice of trust repudiation, will not bar your claim.
• For Trustees: Do not assume that time alone will protect you from liability for breaches of fiduciary duty. Unless you have clearly repudiated the trust and notified the beneficiary, laches will not be available as a defense. Instead, focus on fulfilling your duties transparently and in accordance with the trust’s terms.

Conclusion

In Virginia, the doctrine of laches is a narrow and rarely available defense for trustees facing breach of fiduciary duty claims. Unless the trustee has clearly repudiated the trust and communicated this to the beneficiary, courts will not allow laches to bar a beneficiary’s claim. Trustees who rely on laches without meeting these strict requirements risk significant legal exposure and liability.