If a decedent's trust does not align with his or her final wishes, it may raise questions for his or her family and friends. Can a trust be challenged? And if so, what are the grounds for contesting a trust? While it is possible to contest a trust, only those with a financial interest in the outcome may do so, and it can only be done on specific grounds. This article will provide you with information as to what circumstances may warrant a challenge to a trust. It also should be noted that there are many different types of trust, and not all trusts work in the same way.
Having said that, there are several circumstances in which it may be legal to contest a trust. These include:
Lack of capacity of the person who created the trust at the time it was established.
Undue influence or fraud in the creation of the trust.
Duress or coercion in the creation of the trust.
The trust was not properly executed according to the laws of the state.
The trust was created as a result of a mistake or misunderstanding.
Changes in circumstances or family relationships that were not anticipated when the trust was established.
It is important to note that contesting a trust can be a complex legal process, and it's recommended to seek the advice of a qualified attorney such as Anthony Saccaro Law.
1- What is a lack of capacity?
Lack of capacity refers to a person’s inability to understand the nature and consequences of decisions made or actions they may take. This could be due to mental illness, dementia, or other factors that impair their cognitive ability. When a trust is created by
someone who lacks capacity, it may be vulnerable to being contested by others.
If another person believes that the individual who created the trust lacked capacity at the time of its creation, they may be able to contest the trust in court. This is because a trust created by someone who lacks capacity is not considered legally valid. The court may appoint a guardian or conservator to manage the individual's assets and ensure that their best interests are protected. Ultimately, contesting a trust due to a lack of capacity can help ensure that the individual's wishes are respected, and their assets are managed appropriately.
2- Undue Influence
Undue influence or fraud in the creation of the trust refers to situations where a person is coerced or manipulated into creating a trust or modifying an existing one. This can occur when someone in a position of power, such as a caregiver or family member, exerts pressure on the trust creator to make changes that benefit them at the expense of other beneficiaries. Fraud in the creation of the trust occurs when someone misrepresents information or withholds important details to deceive the trust creator into making certain decisions. These actions can be illegal and may result in the trust being declared invalid.
If a person suspects that undue influence or fraud has occurred in the creation of a trust, they should consider contesting it. This is because the trust may not accurately reflect the true intentions of the trust creator and may unfairly benefit certain individuals. Contesting a trust allows beneficiaries to challenge the validity of the trust in court and potentially have it invalidated. This can result in a prior trust document controlling that better reflects the trust creator's true intentions and ensures that all beneficiaries are treated fairly.
3- Duress or coercion
Duress or coercion refers to situations where the creator of a trust is forced or threatened into making certain decisions. For example, if a person is under extreme pressure from a family member to create a trust in their favor, this would constitute duress. Similarly, if the creator of the trust is threatened with physical harm or other negative consequences unless they create the trust, this would be considered coercion.
When a potential beneficiary believes that a trust was created under duress or coercion, they may be able to contest the trust in court. This is because trusts are supposed to be created voluntarily and without undue influence from others. If a beneficiary can prove that the creator of the trust was not acting voluntarily or was under the influence of someone else at the time the trust was created, they may be able to have the trust declared invalid. This can be a complex legal process, but it is one that is available to potential beneficiaries who believe that they have been unfairly excluded from a trust.
4- Not properly executed
A trust may not be properly executed according to the laws of the state if the required legal formalities are not strictly followed. For example, if the trust document is not signed by the settlor and notarized, it may not be enforceable. Similarly, if the settlor lacked the mental capacity to create a trust or was unduly influenced by someone else, the trust may be invalid.
If a trust is not properly executed, it may be challenged in court by interested parties. Contesting the trust may be necessary to ensure that the settlor's wishes are carried out properly and that the assets are distributed as intended. If the trust is found to be invalid, the assets may be distributed according to the settlor's prior trust document or the laws of intestacy, which may not reflect the settlor's true intentions. Therefore, contesting the trust can be an important step in protecting the settlor's legacy and ensuring that their wishes are respected.
5- The trust was created as a result of a mistake
A trust can be created as a result of a mistake or misunderstanding when the settlor, the person creating the trust, unintentionally or mistakenly assigns property to an incorrect beneficiary.
For example, if a settlor intends to transfer property to their son, but mistakenly transfers the property to their daughter instead, a constructive trust could be created as a result of
the mistake. The daughter could become the trustee of the property and could have a legal obligation to hold and manage the property for the benefit of the intended beneficiary, the son.
However, if the mistake is discovered and the son contests the trust, they may be able to argue that the trust was created as a result of a mistake and should be modified, corrected, or even determined to be invalid. In order to contest the trust, the son would need to provide evidence that the transfer of property was a mistake, and that the settlor did not intend to create a trust with the daughter as the trustee. If successful, the property would be returned to the settlor's possession and the trust would be dissolved.
6- Changes in circumstances
Once a trust is established, it may be difficult to change the terms or revoke it. However, changes in circumstances or family relationships that were not anticipated when the trust was established may be grounds to contest the trust.
For example, if the trustor had a child after establishing the trust and did not include them as a beneficiary, that child may contest the trust on the grounds that they should have been included. Similarly, if the trustor's spouse remarries and has children from a previous marriage, those children may contest the trust if they feel they are not receiving a fair share of the assets. In these situations, the court may consider the circumstances and relationships involved and make a decision on whether the trust should be modified or revoked.
In conclusion, contesting a trust can be a complex and emotionally charged process. It is important to seek guidance from a qualified legal professional to navigate these circumstances. At Anthony Saccaro Law, our team has the expertise and experience to help you through this difficult time. Don't hesitate to reach out to us for a consultation and let us help you protect your rights and interests. Contact us today to schedule an appointment.