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Contesting a Trust

What Are Grounds for Contesting a Trust in California?
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What Are Grounds for Contesting a Trust in California?

There are many reasons someone may want to contest a trust in California. Family members who have been left out of the Trust or think the trust assets have been mismanaged should consider contesting it. A Trust contest is done by someone who has legal standing to do so. Call Hess-Verdon, California’s top trust attorney, at (949) 706-7300 to know your legal grounds and determine if the Trust is deemed invalid.

What is a Contested Trust?

A contested trust is a trust that has been challenged in court by a beneficiary, trustee, or another interested party. When interested parties find a legal document fraudulent, the court will review the Trust and its contents to determine whether there are grounds for contesting the Trust’s validity. The Trust, however, may have a no-contest clause, meaning the trustor’s wishes are not to have trust disputes and that their wishes be carried out.

Why Do I Want to Contest?

The decision to contest a trust should never be taken lightly. While it can have many positive results, it can also have negative consequences. If you contest a trust and lose your case, you’ll likely have to pay all legal fees associated with prosecuting your case. Additionally, even if you win your case, your relationship with other beneficiaries may suffer long-term damage due to fighting over money or property.

How to Legally Contest a Trust

CAN A TRUST BE CONTESTED? Yes, but it’s not easy. You’ll need to prove that the Trust is invalid or that the person who created it was in some way incompetent or ill-informed about its contents at the time of signing. Below are a couple of valid reasons why you might have an issue with a trust:

WHAT CAN INVALIDATE A TRUST?

When someone dies, you may learn they had a trust to transfer their assets. A Trust can be good news — it means their estate will be able to avoid probate court. However, that doesn’t mean you have to accept the terms of the Trust without question. There are several valid reasons why you might want to contest a trust.

Incapacity, i.e., Lack of Capacity

The most common reason for contesting a trust is that the person who made it could not understand what was going on (mental capacity) or was under undue influence from another person. A lack of capacity could be due to dementia, mental illness, or simply being too young (under 18).

Undue influence

Undue influence is when one person manipulates another into signing documents that do not reflect that person’s wishes.

Fraudulent inducements, i.e., Unduly pressured or coerced

This section will be the most difficult to prove. It requires evidence that the grantor was fraudulently induced into signing the trust instrument. The grantor must show they would not have created the Trust had they known of the fraudulent inducement. For example, if you are told you are signing a contract for a new car, and instead, you find out you signed a trust instrument. However, it might be difficult to argue that the grantor did not read or understand what they were signing in this circumstance.

Lack of disclosure

A lack of disclosure occurs when an agent does not disclose all material facts to the grantor. This section is easier to prove because it does not require evidence of deceit or misrepresentation, only a failure to disclose all material facts.

Ambiguity in the language of the trust instrument

This section is relatively easy to prove in court because it only requires ambiguity in the language of the trust instrument; it does not matter whether there was any intent by someone to deceive. It only matters that the language was ambiguous and resulted in a loss to one of the parties. Often this can occur when standard form documents are used and provisions do not fit particular situations.

The Trust is not what the deceased intended.

The deceased might have changed their will and then not updated their Trust. If there’s a conflict between the two documents, the court may be forced to decide which one is more valid. Ideally, you can resolve this issue by working with a financial adviser and an estate planning attorney to determine which estate plan document should be followed. But if that doesn’t work, you may need to go to probate court.

The trustee is misusing their power.

Trustees are supposed to act in everyone’s best interests. They might be violating the law if they’re spending money on themselves instead of following directions. If you suspect this is happening, you should gather evidence and contact an attorney specializing in trusts and estates.

The trustee isn’t managing accounts properly.

Trustees are supposed to follow instructions left in the Trust. If they’re making mistakes or mismanaging the Trust, it could cost beneficiaries their inheritance. This could be especially serious if investments are involved since losses could mean less money for all beneficiaries at the end of the day or even nothing if the account goes into debt. Again, seek legal advice as soon as possible if you think this is happening — don’t wait until it’s too late.

You believe a trustee is not acting in your best interests.

A trustee has a fiduciary duty to act in your best interests and ensure that they manage the Trust correctly. When a trustee is not doing their job correctly, it might be possible for beneficiaries to bring an action against the trustee when there have been losses due to mismanagement.

Limitations and Deadlines for Contesting a Trust

The deadline for filing a contest of a trust is usually tied to the date you were made aware of the trustor should have been made aware of the Trust. In addition, there are limitations tied to when you can contest a trust, so if you wait too long, your contest may be dismissed. It is essential to discuss your specific situation with an attorney before deciding whether or not it is worth filing the contest.

Time Limits for Contesting a Trust

A person has the right to contest an irrevocable trust only if they do so within the time limit specified in the trust document. This time limit is often one year from the date the trustee mails notice of the Trust to potential beneficiaries or heirs of the decedent (the person who created and signed the Trust). If there is no such notice in writing to potential beneficiaries, then the limitation period may differ. Therefore, it is vital to consider contesting a will or challenging a trust by consulting with an attorney as soon as possible. Time is of the essence so that they do not lose this right.

Contested trusts are often for complex, emotional, and personal reasons. It’s essential to understand your options before taking action. Our experienced estate planning attorneys at Hess-Verdon law firm are ready to help you get what you deserve. Call us today at (949) 706-7300.

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