There are many situations when the beneficiary of a trust may realize that some aspect of their inheritance has been tampered with, usually by being dramatically decreased or by the sudden appearance of a new beneficiary in the final version of the document. When the intended beneficiaries or family members believe something is incorrect or missing in a trust, there may be legal options for challenging the trust.
Before any trust can be terminated or modified, the person challenging a trust must have proper standing. This is a legal term that simply means only the beneficiary of a trust can contest the trust in most states. There may be exceptions to this based on location, which is why it may be in your best interest to consider working with a probate attorney if you are contesting trust.
To contest the legal trust instrument, a person should have, first of all, legal standing or legal grounds. The following people would have legal standing to contest a trust:
Heirs of the trust grantor;
A successor trustee.
However, even if a person has legal standing to contest a trust, the ability to do so is not guaranteed. In addition to legal standing, a person must have reasons to contest a trust, such as the following:
The reason behind creating a trust was based on coercion or undue influence from intended trust beneficiaries;
The trust grantor had a mental illness or other serious reason for incompetence while making the trust document;
The trust document was copied fraudulently by interested parties;
Trust assets were mismanaged according to the estate plan.
You can always contest an entire trust if there is a reliable reason, such as a compromised cognitive state during trust execution or the mismanagement of trust assets. In most instances, contesting a trust is the only proper action. Another option is to contest a trust amendment for compelling trust disputes.
There are many possible reasons for a dramatic decrease in a person’s inheritance or the sudden appearance of a new beneficiary. If you want to challenge the trust agreement, however, and win your trust contest, you will have to consider the following grounds:
Unlawful purpose: According to the Uniform Trust Code in the United States, a trust can be deemed legally invalid if its purpose is unlawful or counter to public policy. For example, limitations on freedom to marry or religious freedom can legally contest a trust. Trusts violating state rules against perpetuities can also be challenged.
Fraud or undue influence: Evidence of undue influence or fraud would provide grounds for trust contests. For example, convincing a deceased family member to sign a document they did not understand or drafting a new trust without their permission might be grounds for a trust contest.
Lack of capacity: Contesting a trust based on the deceased's mental capacity, mainly if they had a condition like Alzheimer’s or Dementia known to impair cognitive functions, is another prevalent reason for trust contest. If recent changes to the trust seem to reflect such impairment, the trust can be legally challenged.
Problems with language: Ambiguity in the trust document's language leading to divergent interpretations among the inheritors can lead to a trust contest. Unclear language can lead to petitions seeking termination or modification of parts of the trust.
There are some cases when a person may wonder about the legitimate value of trust. The following are some of the most common examples of non-standard trusts and what is recommended to do to win a trust contest.
Can a trust be contested if it is unsigned? An unsigned trust is essentially invalid and can be contested. Although professional advice is always recommended in these cases, an unsigned trust is often regarded as default proof of the settlor’s dispositive intent.
Can an irrevocable trust be contested? While irrevocable trusts cannot be changed, they can be contested on the same grounds as a standard trust. With reasonable grounds, an irrevocable trust can be nullified or contested.
Can you contest a trust amendment? A trust amendment can be contested separately from the entire trust. This can be particularly relevant if mental competence may have been compromised when the amendment was executed.
Can someone contest a trust in handwritten form? A handwritten signed trust can be legitimate and, therefore, can be contested. Trusts do not need to be typed to be valid. A handwritten trust can be contested on the same grounds as a typed trust.
Can a trust be contested if it has a no-contest clause? When a trust has a no-contest clause, it doesn't wholly safeguard the trust from being contested. However, it presents risks, meaning professional legal advice should be sought before any contest. An estate litigation attorney could help navigate through these risks.
In order to contest fraud in the United States, you must be swift. Some trusts have what is referred to as a no-contest clause that, if it exists, means probable cause must exist for someone to legally bring a lawsuit before a judge.
Depending on the issues with trust funds or wills, an attorney will work to locate strong evidence from either friends and family members who might have better understood the deceased family member’s wishes when the trust was drafted initially or medical records that prove mental incapacity prior to the time the document was signed.
The time allowed depends on state law. It might be 120 days from the date of the trust creator’s death or mental illness or even several years. Review your state’s probate laws to help you determine the period.
The cost to contest a trust can significantly vary depending on various factors, and therefore, it's challenging to provide a firm figure without knowing the specifics of the case. However, on average, the process may range from several thousand dollars to tens of thousands or more.
The price considerations typically include:
Attorney's fees: Legal representation constitutes the most substantial chunk of costs. Depending on the lawyer's experience, location, and scope of the lawsuit, hourly rates can range from $200 to $400 on average, but experienced probate lawyers or those in large cities can charge over $500 per hour. If the proceedings are prolonged, attorney fees could reach tens of thousands.
Court filing fees: These are mandatory, irrespective of the case's outcome, and might range from a few hundred to a few thousand dollars, depending on the court and the complexity of the case.
Other costs: These encompass items such as fees for expert witnesses, costs related to evidence gathering, document preparation, and other miscellaneous charges associated with the lawsuit.
Overall, if you have trust issues, consider working with an attorney who is aware of the statute of limitations for your unique situation. You can also find legal help at Lawrina, a reliable legaltech ecosystem. Remember that to contest a trust, you will need to present adequate evidence depending on your grounds for filing.
Yevheniia Savchenko is a Product Content Manager at Lawrina. Yevheniia creates user interface copies for Lawrina products, writes release notes, and helps customers get the best user experience from all Lawrina products. Also, Yevheniia is in charge of creating helpful content on legal template pages (Lawrina Templates) and up-to-date information on US law (Lawrina Guides). In her spare time, Yevheniia takes up swimming, travels, and goes for a walk in her home city.