How Can a Trust be Challenged?

As California lawyers, the attorneys at KJMLAW Partners are often asked about how to challenge a trust or how to create a trust that will withstand a challenge. Trusts are powerful legal instruments designed to protect assets, provide for beneficiaries, and facilitate estate planning. However, like any legal arrangement, trusts can be subject to challenges under certain circumstances. Whether due to suspicions of undue influence, lack of capacity, or errors in the trust document, individuals may seek to contest a trust’s validity.

Understanding Trusts:

Before addressing challenges to trusts, it’s essential to understand what a trust is and how it operates. 

A trust is a legal entity that involves dealing with certain kinds of assets that have been put in the trust. A trust includes three different parties; 1) The grantor (also known as the settlor or trustor), who initiates the creation of the trust; 2) the trustee, who is responsible for managing the trust according to the terms of the trust document; and 3) the beneficiary or beneficiaries, who usually receive money or something else of value from the trust.

Trusts come in two flavors—revocable and irrevocable. As its name suggests, a revocable trust can be modified by the grantor during the grantor’s lifetime. By contrast, an irrevocable trust generally can’t be revoked or modified once it has been set up. Trusts can also be created for various purposes, including asset protection, estate tax planning, and charitable giving.

Grounds for Successfully Contesting a Trust:

• Lack of Capacity: Alleging that the grantor lacked mental capacity to create the trust is one of the most common arguments made to challenge trusts. If it can be demonstrated that the grantor was not of sound mind or did not fully understand the implications of creating the trust, a court may invalidate the trust.
• Undue Influence: A trust may also be challenged on the basis of undue influence, whereby someone exerted pressure or coercion on the grantor to create or modify the trust in a manner that benefits the influencer. This often involves situations where a caregiver, family member, or other individual with a close relationship with the grantor allegedly manipulated them into making changes to the trust that they would not have otherwise made.
• Fraud or Duress: If it can be proven that the trust was created or modified due to fraud or under duress, it may be subject to challenge. This could include instances where false representations were made to the grantor or where they were forced into executing the trust document against their will.

Legal Procedures for Challenging a Trust:

Challenging a trust typically involves filing a petition in probate court. The petition details the facts alleged to have led to the improper situation and the laws that have been violated. Interested parties, such as beneficiaries or potential heirs who believe they have been wrongfully excluded or disadvantaged by the trust, may bring such a petition to the court to review the trust’s validity. Once such a petition is brought, all interested parties are entitled to get notice of it and participate in the court action.

Who Can Contest a Trust?

Contesting a trust typically involves challenging its validity or terms in court. There are several categories of individuals who may have standing to contest a trust:

• Beneficiaries: Beneficiaries named in the trust or individuals who would have been beneficiaries had the trust not been created may contest the trust. This could include heirs, family members, or others who believe they are entitled to a share of the trust assets or who believe they have been unfairly excluded or disadvantaged by the trust’s terms.
• Potential Beneficiaries: Individuals who believe they should have been included as beneficiaries in the trust but were not named may also have standing to contest the trust. This could include individuals who were promised a share of the trust assets or who have a reasonable expectation of receiving a benefit from the trust.
• Heirs: Individuals who would inherit from the grantor’s estate if there were no trust or if the trust were invalidated may contest the trust. Heirs are typically close relatives of the grantor, such as spouses, children, grandchildren, or siblings, who would inherit under the laws of intestate succession if the grantor died without a valid will or trust.
• Creditors: In some cases, creditors of the grantor or the trust may have standing to contest the trust, particularly if they believe the trust was created or modified to defraud creditors or avoid legitimate debts.

It’s important to note that only some people have standing to contest a trust.

Individuals considering contesting a trust or defending against a challenge should consult with experienced legal professionals who can provide guidance based on the specific facts and circumstances of their case.

What are the Chances of Successfully Contesting a Trust?

The chances of successfully contesting a trust depend on various factors, including the grounds for the challenge, the evidence available, the applicable laws, and the expertise of legal representation. Contesting a trust can be complex and challenging, and success is not guaranteed. However, under certain circumstances, a trust challenge can be successful. Here are some factors that may influence the likelihood of success:

• Strength of Legal Grounds: The strength of the legal grounds for contesting the trust is crucial. Grounds such as lack of capacity, undue influence, fraud, or errors in the trust document may be more compelling if supported by clear evidence.
• Quality of Evidence: The availability and quality of evidence to support the allegations made in the trust challenge are essential. Documentary evidence, witness testimony, expert opinions, and other corroborating evidence can strengthen the case.
• Applicable Laws: The statutory and case law governing trusts and estate litigation in California is detailed. Understanding the legal standards and requirements for contesting a trust is essential. Experienced legal counsel familiar with trust and estate law can provide valuable guidance.
• Timing: Timeliness in bringing the challenge is critical. There are statutes of limitations or specific deadlines for when certain contests must be filed. Failing to file the challenge within the prescribed time frame can seriously impact the chances of success. If you think you have grounds for a trust contest, you should consult with legal counsel to determine what deadlines you may be facing.
• Court Proceedings: The outcome of trust litigation often depends on the judge’s interpretation of the law and the evidence presented during court proceedings. Skilled legal representation and effective advocacy in court can influence the judge’s decision.
• Resolution Options: Depending on the circumstances, there may be opportunities for negotiation, mediation, or settlement discussions outside of court. Exploring alternative dispute resolution methods can sometimes lead to a more favorable outcome without the need for protracted litigation.
• Costs and Risks: Contesting a trust can be costly and time-consuming. Individuals considering a trust challenge should weigh the potential costs and risks against the likelihood of success. It’s essential to assess whether the potential benefits outweigh the expenses and potential drawbacks of pursuing litigation.

Overall, the chances of successfully contesting a trust can vary widely depending on each case’s specific facts and circumstances. While some trust challenges result in favorable outcomes for the challengers, others do not succeed. Consulting with experienced legal professionals who specialize in trust and estate litigation can provide valuable insight and guidance for individuals considering contesting a trust.

Is It Difficult to Contest a Trust?

Generally, a trust is a legally binding arrangement that involves a grantor transferring assets to a trustee for the benefit of beneficiaries. Trusts are typically established with specific terms and conditions outlined in a trust document. While trusts are designed to be durable and enduring, there are certain circumstances under which a trust can be terminated or modified, effectively “breaking” the trust. Here are some scenarios in which a trust may be “broken” or terminated:

• Trust Termination by Its Terms: Some trusts have provisions that specify conditions under which the trust will terminate. For example, a trust may state that it terminates upon the death of the grantor or upon a certain event occurring, such as all beneficiaries reaching a certain age or a specific date being reached.
• Consent of Beneficiaries and Grantor: In some cases, all beneficiaries and the grantor (if living) may agree to terminate the trust or modify its terms. This typically requires unanimous consent and may involve petitioning the court for approval, especially if the trust is irrevocable.
• Court Intervention: Courts have the authority to intervene and modify or terminate trusts under certain circumstances. This could occur if the trust’s purposes have become impossible or illegal to fulfill, if the trust is uneconomical to administer due to changes in circumstances, or if the grantor and beneficiaries petition the court for modification or termination.
• Failure of Trust Purpose: If the purpose for which the trust was created becomes illegal, impossible, or impracticable to achieve, a court may order the trust terminated.
• Cy Pres Doctrine: Under the cy pres doctrine, if a trust’s original purpose becomes impossible or impracticable to fulfill, a court may modify the trust’s terms to achieve a purpose as near as possible to the original intent.
• Mandatory Distribution of Trust Assets: In some cases, trusts may have provisions that require the distribution of trust assets to beneficiaries at a certain point, effectively terminating the trust.

It’s important to note that the process of terminating or modifying a trust can be complex and may involve legal proceedings. The specific procedures and requirements for breaking a trust vary depending on the laws of the jurisdiction and the terms of the trust document. Individuals seeking to terminate or modify a trust should consult with experienced legal professionals specializing in trust and estate law for guidance on the appropriate steps to take.

When to Contact a Probate Attorney

If you believe that a will or trust is invalid or that you’ve been unfairly excluded from an estate, you may have grounds to contest the document. A probate attorney can evaluate the merits of your case, advise you on your legal rights, and represent your interests in court proceedings if necessary.

It’s advisable to contact a probate attorney whenever you have questions or concerns related to estate planning, administration, or disputes. An experienced attorney can provide invaluable guidance, representation, and peace of mind throughout the process.

Contact KJMLAW Partners Today 

Call us at 626-568-9300 if you have questions about contesting a trust.