It’s a familiar and regrettable scenario: a family member consistently assures you that you’ll inherit certain assets from their trust, but following their death, you receive a copy of their trust only to discover the assets that were promised to you were left to someone else. It turns out your family member amended their trust to disinherit you just months before their death.
If you are dealing with an identical scenario or a similar one, it’s natural to feel taken aback. You may even be questioning whether the new beneficiary of the assets you’d been promised manipulated, pressured or deceived your family member into changing their end-of-life plans.
It would be impossible to draw accurate conclusions about the actions of the new beneficiary or the validity of your family member’s trust based on the aforementioned facts alone; however, the facts are suspicious enough to warrant further investigation. Your will and trust lawyer can conduct a preliminary investigation on your behalf.
If their investigation confirms your suspicions about the new beneficiary, the next step would be to bring a trust contest. To do this, your lawyer would need to draft and file a petition to invalidate your family member’s trust. In the petition, they not only would need to establish that you have legal standing and legitimate grounds for contesting the trust, but they would need to present facts to support your claim.
Next, your lawyer would need to meticulously review the opposing party’s response to your petition. Depending on the strength of their defenses and counterclaims, your lawyer will decide whether any pretrial motions need to be filed. For example, if the respondent’s defenses or counterclaims are weak, your lawyer may aim to resolve the case before it goes to trial by filing a motion for summary judgment.
The vast majority of trust contests don’t go to trial, but if your case does go to trial, your lawyer would need to obtain evidence from third parties and the opposing party by means of the discovery process. The trial itself could also go on for weeks. Your lawyer wouldn’t just have to be present for the trial, but they would need to spend time preparing and researching beforehand.
Given all the steps your lawyer must complete to contest a trust, it’s easy to see why trust contests generally come with a high price tag. It’s important to be forthright with your lawyer about what you are willing to spend to secure the results you want. This way, your lawyer will have an understanding of your budget from the get-go and accordingly provide you with recommendations for resolving your matter.
The probate attorneys at Keystone Law Group exclusively dedicate their practice to probate litigation and administration matters. They are highly experienced in litigating trust contests and can provide you with potential resolutions and cost estimates after learning the specifics of your case. Reach out to our firm today to request a free consultation.
What Payment Structure Do Trust Contest Lawyers Use?
Potential clients often inquire about our payment structure, but the truth is that our payment structures can vary based on such factors as the strength of the client’s case, the amount in dispute, and the client’s individual needs and desires.
That said, our firm will generally offer one or more of the following payment structures to clients as options:
Hourly Basis
It is most common for probate firms to utilize a payment structure in which they collect a retainer (i.e., upfront payment), after which they charge hourly for their services. Most firms send monthly invoices to their clients, who, in turn, are responsible for paying all charges upon receipt of the invoice.
If you can afford to pay a law firm’s retainer and hourly fees, this is almost always the preferable option, as it allows you to keep the full amount of any recovery your attorney secures for you.
The cost of contesting a trust can vary considerably from case to case because of the unique nature of each trust contest and the individual goals of each contestant.
For example, if a trust creator (called a settlor, grantor or trustor) amended their trust after their physicians had already declared them to be incapacitated to take such an action, having the amendment invalidated may be a more straightforward and inexpensive process on account of the declaration of incapacity providing much of the evidence you would need to prove the settlor lacked the requisite mental capacity to make a trust.
On the other hand, if a settlor had never been diagnosed with a cognitive disorder or been declared by their physicians to be incapacitated, having a trust amendment invalidated on the ground of incapacity could prove to be a challenging and expensive process. For example, your lawyer may need to perform significant legwork to obtain medical documentation from the settlor’s physicians and testimony from those who were close to them. They may even need to collaborate with expert witnesses, who, like attorneys, charge for their time.
In the same vein, if you are contesting a trust on the ground of undue influence, and the accused party is vehemently defending their inheritance and refusing to settle, the cost of contesting the trust could rise significantly, since the parties would have to engage in extensive discovery for the matter to be favorably resolved by the contesting party.
If you have a skilled lawyer in your corner, they will be able to advise you about how to proceed, no matter the challenges arise along the way. Still, it’s important to be aware of the factors that could influence the cost of contesting a trust so you can make informed decisions as you navigate the trust contest process.
Keep in mind that the factors discussed in this section that could impact the cost of your trust contest apply only if you choose to pay your lawyer on an hourly basis.
How Much Does It Cost to Contest a Trust if Others Join Your Contest?
If you are concerned that a deceased person’s trust is invalid, it may be wise to discuss your concerns with the other interested parties to find out whether they have the same concerns. If they do, you could ask them whether they’d be willing to join your trust contest.
Teaming up with other trust beneficiaries or heirs to bring a contest could greatly offset potential fees, since fees would be split among the contestants. It also could enable you to litigate on a more flexible budget.
Keep in mind that when a beneficiary abstains from participating in another beneficiary or heir’s trust contest, they could lose their seat at the negotiating table and possibly even their inheritance. Put simply, there are serious risks associated with being a bystander beneficiary. If you stand to inherit from a trust, don’t abstain from participating in a trust contest without first discussing your decision with a knowledgeable lawyer.
How Much Does It Cost to Contest a Trust if Your Contest Is Complex?
As you might suspect, bringing a complex trust contest could substantially raise the cost of contesting a trust.
What makes a trust contest complex? A trust contest may be complex if a substantial amount of money is at stake (typically $1 million or more). A trust contest may be complex if the trustee is defending the trust against your contest. A trust contest may be complex if a long, drawn-out discovery process is needed to accumulate evidence, such as the deposition of multiple witnesses and the retention of experts (e.g., physicians, handwriting analysts), to support your claim. Of course, these are not the only qualities that could make a trust contest complex; they are just some of the most common.
Take the example of our “Sugar Daddy Abuser” case. This case was highly complex due to a number of factors. For one, the settlor, despite being a senior, was not incapacitated in a traditional sense. Second, the contestants were not directly related to the settlor; rather, they had been the nieces and sister of the settlor’s former husband and had been named as beneficiaries only in the settlor’s prior trust, which perhaps made them less-than-sympathetic figures. Lastly, a reputable and well-known estate planning firm in Los Angeles had prepared the trust at issue, which suggested the trust was created according to established rules and procedures.
Because of these factors, proving the invalidity of the trust would be an uphill battle for our lawyers. While it was clear to our lawyers that a new boyfriend had intentionally entered the settlor’s life at a time when he had been vulnerable and lonely to benefit from his substantial wealth, they would need to not only prove that the settlor didn’t intend for his new boyfriend to inherit his wealth, but that the settlor amended his trust as a result of his new boyfriend’s undue influence.
It also would be a significant challenge for our lawyers to prove their clients, the contestants, had standing to contest the trust, since their relation to the settlor had dissolved when his divorce from his former husband was finalized. In California, gifts made to a former spouse in a trust or will automatically are voided. Based on this rule, it would be logical to assume gifts made to the family members of former spouses would automatically be voided as well.
Our lawyers conducted a far-ranging discovery to gather the evidence they needed to prove how far the settlor’s boyfriend had been willing to go to be named the sole trustee and beneficiary of the trust. They also needed evidence to paint an accurate picture of just how broken and mentally unsound the settlor had been at the time he executed his new trust.
Our lawyers’ hard work paid off in the end, as our clients received a settlement that approximated the value of their inheritance under the prior trust. Needless to say, it was expensive for our clients to contest the trust due to the extreme complexity of the case. However, it was a cost worth paying for our clients, who couldn’t have been more satisfied with the results our lawyers achieved for them.
If you are unsure where on the complexity spectrum your trust contest falls, a knowledgeable lawyer can provide helpful insight.
How Much Does It Cost to Contest a Trust if You Settle?
Settling a trust contest outside of court instead of taking your case to trial can significantly reduce the cost of contesting a trust.
As we already discussed, trials generally involve a grueling multi-day or multi-week court process, countless hours of preparation on the part of your lawyers, and possibly even the hiring of expert witnesses who may charge considerable fees for the time they spend preparing for and testifying on your behalf. In addition, you will have court fees to pay. For every day litigation persists, costs will rise. And did you know litigation can persist for years?
On the other hand, settling generally involves the parties to the contest attending a meeting outside of court known as mediation. At mediation, a neutral third party will lead a negotiation between the parties and their lawyers in an attempt to reach a mutually agreeable compromise. Mediation is how the vast majority of trust contests are resolved.
Though mediation is generally a viable option for resolving trust contests, they do generally require each party to give up something they want (as is the nature of a compromise). If you are unwilling to find a middle ground with the other party, settling your contest at mediation likely isn’t the right option for you.
It’s also important to point out that the cost of contesting a trust can vary based on when in the process the parties decide to settle. Settling early typically costs substantially less than settling late.
For example, suppose your lawyer files an irrefutable petition to invalidate your deceased loved one’s trust on the ground of fraud. If the opposing party senses the petition would be difficult to defend, they may express an immediate willingness to settle. If you agree, you basically would only have paid for the preparation and filing of the initial trust contest petition and for settlement of the dispute.
On the other hand, if the parties wait until right before trial to settle, the cost to contest the trust could be very high. You not only would have paid for the preparation and filing of the initial trust contest petition, but for pretrial motions (if any were made), discovery, and likely at least one session of mediation.
A trust contest can sometimes be resolved in a single day of mediation, but complex matters can span several days. The more mediation sessions there are, the higher the cost to contest a trust will be.
Contingency Basis
Clients often ask us whether we work on a contingency basis. When lawyers charge on a contingency basis, it means they only take a fee if they obtain a recovery for the client and, at times, the lawyers will also cover the upfront costs for the client.
While some trust contest cases may be suitable for a contingency fee arrangement, others may not be. When a law firm takes on a case on a contingency basis, it makes a financial investment, assuming the risk of an unsuccessful outcome. Due to this risk, law firms naturally are selective about the cases they accept on a contingency fee basis.
In general, for a law firm to take on a case on a contingency basis, the strength of the case should be evident from the beginning. However, assessing the strength of a case early on can be challenging, as clients rarely have enough evidence at this stage to support their claims.
Contingency fees in trust contest cases are not determined by the law. Rather, clients and their lawyers can reach an agreement amongst themselves as to the amount of the contingency fee and who will be responsible for the upfront costs.
California Business and Professions Code section 6147 describes the information a valid contingency fee agreement between a lawyer and client should contain:
(a) An attorney who contracts to represent a client on a contingency fee basis shall, at the time the contract is entered into, provide a duplicate copy of the contract, signed by both the attorney and the client, or the client’s guardian or representative, to the plaintiff, or to the client’s guardian or representative. The contract shall be in writing and shall include, but is not limited to, all of the following:
(1) A statement of the contingency fee rate that the client and attorney have agreed upon.
(2) A statement as to how disbursements and costs incurred in connection with the prosecution or settlement of the claim will affect the contingency fee and the client’s recovery.
(3) A statement as to what extent, if any, the client could be required to pay any compensation to the attorney for related matters that arise out of their relationship not covered by their contingency fee contract. This may include any amounts collected for the plaintiff by the attorney.
(4) Unless the claim is subject to the provisions of Section 6146, a statement that the fee is not set by law but is negotiable between attorney and client.
(5) If the claim is subject to the provisions of Section 6146, a statement that the rates set forth in that section are the maximum limits for the contingency fee agreement, and that the attorney and client may negotiate a lower rate.
(b) Failure to comply with any provision of this section renders the agreement voidable at the option of the plaintiff, and the attorney shall thereupon be entitled to collect a reasonable fee.
(c) This section shall not apply to contingency fee contracts for the recovery of workers’ compensation benefits.
(d) This section shall become operative on January 1, 2000.
If you were hoping to hire a firm on a contingency fee basis, keep in mind that these fees usually are substantial and can vary based on when your case is resolved. For example, if your case is resolved early in the process, your contingency fee generally would be around one-third (1/3) of your recovery. If your case is resolved after litigation has started, your contingency fee generally would be around 40% of your recovery. If your case goes to trial or is resolved at trial, your contingency fee generally would be around 50% of your recovery. Of course, the larger the amount in dispute, the more opportunity you have to negotiate a lower fee.
If you can afford to pay hourly, it may not be in your best interest to opt for a contingency fee arrangement. However, the benefit of a contingency fee arrangement is that you do not bear the risk of paying your lawyer’s fees if you lose.
Hybrid Arrangement
Although we cannot speak for other firms, if Keystone is willing to take a case on a contingency fee basis, Keystone is also willing to negotiate with clients a hybrid arrangement consisting of both an hourly rate and a contingency fee.
For example, we may charge you only half our hourly fees in exchange for you paying a reduced contingency fee percentage.
A solution such as this can potentially reduce upfront costs because both sides share the risk of loss, but remember, your lawyer will take a portion of your recovery to cover their fees if they win your case — although it will be a smaller portion of your recovery than what they would have taken had they worked solely on a contingency basis.
Flat Fee
Some clients opt for payment structures that avoid hourly rates to alleviate anxieties around accumulating fees. They prefer to pay a flat fee amount, even if it could lead to a higher total cost compared to billing by the hour.
If your budget is limited or you want certainty around how much you’ll pay in fees, a flat fee can seem like the most prudent payment structure to negotiate. However, keep in mind that it’s not a payment structure that is common in probate litigation, as litigation can be unpredictable. As a result, a law firm will typically only offer a flat fee payment option if the amount of work your case will require is relatively simple and predictable.
For example, if you are hiring an attorney to draft an objection to a will’s admission into probate, your attorney’s workload will be finite, which would make it easy for them to calculate a fair flat fee to charge you for this specific service. However, if you are hiring an attorney to see your case to its conclusion, then your attorney may not be able to generate a fair flat fee, since there’s no saying how your case will conclude, whether it will go to trial and what challenges will arise along the way.
If you cannot decide whether a flat rate is for you, discuss the pros and cons of using this payment structure with a trusted lawyer.
Average Cost to Contest a Trust Explained
Providing an average cost for a trust contest can be challenging, as expenses can vary significantly based on the size and complexity of the trust, the grounds for the contest, and the desired outcome, among other things. Additionally, because there are a variety of payment structures, it can be difficult to determine the cost of a trust contest without knowing which payment structure your attorney will offer you. That said, we’ll do our best to provide estimates below. Keep in mind that the estimates are only for clients paying their attorneys’ hourly rates.
For trust contests settled with minimal discovery, costs will be at least $50,000. For trust contests settled during mediation after some discovery, costs can range from $50,000 to $150,000. For trust contests with extensive discovery settled late in the litigation process or that go to trial, costs can exceed $150,000. Of course, these figures are estimates, so there are more complex trusts contests or high-value contests (with the amount in dispute exceeding $10 million) that will likely fall far outside of this range.
Balancing the desire to uphold your deceased loved one’s final wishes with the need to uphold your budgetary constraints can be difficult. However, our legal team is experienced in effectively litigating trust contests on both conservative budgets and flexible ones. We will collaborate with you to devise a legal strategy that will allow you to achieve your legal goals while keeping costs manageable.
One of the simplest ways to keep costs manageable is to consult with a qualified lawyer early in the process — ideally within a few days of receiving a copy of the trust from the successor trustee. The time limit to contest a trust in California isn’t very long — to be precise, it’s 120 days from the date you receive the notification by the trustee — so it’s essential you act quickly to bring a trust contest; otherwise, your contest could be time-barred.
Remember, the trustee is required to mail notice of trust administration (which should include information about the right of interested parties to contest the trust) within 60 days of the settlor’s death. If you have not received such a notice or a copy of the trust within this 60-day timeframe, it’s crucial you either request the missing documents from the trustee directly or ask your lawyer to secure them for you. Without these documents, it will be virtually impossible for you to enforce your rights.
It’s also important for you to consult with a lawyer before pursuing a trust contest to ensure you have legal standing to bring one. Standing simply means that you have a financial stake in the outcome of the contest. If you stand to receive a greater inheritance from winning your contest, you have standing.
In addition, your lawyer will need to verify whether your grounds for contesting the trust are valid. A trust can only be contested on certain grounds; therefore, unless you can prove that one or more of the established grounds for contesting a trust apply to your case, it’s unlikely the court will grant your petition. Concerns such as undue influence, fraud and the settlor’s incapacitation at the time of execution are some of the most common grounds for bringing a trust contest.
Who Pays the Cost of Contesting a Trust?
Generally, if you are bringing a trust contest, it is best to assume you’ll be covering the cost of contesting the trust. While certain conditions may entitle you to an award of your attorney fees and costs, such an award is never guaranteed.
Furthermore, it’s important to remember the court only awards attorney fees and costs at the conclusion of trials, and only if there is a law that allows it to do so. If your trust contest doesn’t make it to trial (which most trust contests don’t), it likely would be settled outside of court. For your attorney fees and costs to be paid by the trust or opposing party in such a scenario, it would have to be a stipulation of the settlement agreement.
If you are on the fence about contesting a trust because of cost, discuss your budgetary concerns and what to expect as a potential outcome with an experienced lawyer before deciding against bringing a contest. Though the cost of contesting a trust generally is not inconsequential, it shouldn’t deter you if you have a strong case and much to gain by litigating it.
When Must Beneficiaries or Heirs Pay the Cost of Contesting a Trust?
Beneficiaries or heirs who plan to contest a trust should always expect to cover their own legal costs.
If a beneficiary or heir’s trust contest benefitted the trust, they may be able to recover their legal costs by filing a petition with the court seeking an award of their legal costs from the trust. However, since the vast majority of trust contests settle before trial, this may not be an option.
As we mentioned earlier, a term could be added to the settlement agreement you reach that would require the trust to cover your legal costs, but this generally would necessitate the other interested parties’ consent, and there is no guarantee they would provide it. For this reason, assuming you’ll be covering your own legal costs is always the best mindset to keep to avoid unpleasant surprises down the road.
It’s worth noting that if you are a beneficiary who is a respondent rather than a contestant, it’s likely because the other party is accusing you of having engaged in misconduct to be left a greater inheritance than you were receiving previously. If the other party is successful in proving their claims, you not only would have to pay your own attorney fees and costs, but you could be ordered to pay the contestant’s attorney fees and costs as well.
When Might Trustees Pay the Cost of Contesting a Trust?
A trustee would never be personally required to pay the cost of contesting a trust unless their wrongful actions are why the trust is invalid in the first place.
That said, a trustee generally would be authorized to use trust funds to defend against a trust contest if the trust itself is threatened by it.
They also could, in theory, use trust funds to prosecute a contest if they believe a contest to be invalid. However, trustees must tread carefully in such a scenario, as their involvement in the trust contest could be perceived as a conflict of interest by the trust beneficiaries if their stake in the trust is impaired by the contest. Because trustees have a duty of impartiality, any action they take that favors certain beneficiaries over others may be regarded as a breach of fiduciary duty.
If trustees are uncertain about whether their use of trust funds to contest a trust would be authorized, it would be recommended for them to err on the side of caution and check with a lawyer. Using trust funds in bad faith or for unauthorized purposes could result in their being accused of trustee misconduct, which, if proven, could result in a hefty surcharge or trustee removal.
It’s important to keep in mind that because of the high cost of trust contests, they have the potential to drain trusts of their resources, leaving beneficiaries with reduced or nonexistent inheritances. As such, it’s important for the trustee to perform a cost-benefit analysis before using trust funds to contest a trust. If legal costs approximate or exceed the value of the potential recovery, using trust funds to contest a trust may not be a good idea.
When Must the Opposing Party Pay the Cost of Contesting a Trust?
There are only a couple conditions under which the opposing party could be required to pay the contestant’s attorney fees and costs for a trust contest.
If you are the opposing party, or respondent, in a trust contest, you could be ordered to pay the contestant’s attorney fees and costs if the contestant can prove with clear and convincing evidence that you wrongfully took property or acted in bad faith — e.g., by committing elder financial abuse, undue influence, fraud, forgery — to receive a greater inheritance. This, however, would only be a possibility if the trust contest goes to trial and the contestant wins, resulting in the court granting the contestant’s petition for an award of their legal costs.
On the other hand, if the case settles, you would only have to pay the contestant’s attorney fees and costs if it’s included as a stipulation of the settlement agreement. However, such a stipulation generally would not be included as part of a settlement unless you agreed to it and there was ample evidence to demonstrate wrongdoing on your part.
Final Takeaway: Is the Cost of Contesting a Trust Worth It?
Given the cost of contesting a trust, bringing a trust contest may only be worthwhile if a few hundred thousand dollars or more are at stake. However, the decision ultimately depends on your assessment of the situation, on the facts that are specific to your case, and on your personal circumstances. You must weigh the potential benefits against the potential costs to determine whether pursuing a trust contest is the right choice for you.
That said, there are some trust contests that objectively would not be worthwhile. For example, if only $100,000 or $200,000 is at stake, it may not be worth it for you to contest a trust since your legal fees alone could meet or exceed this amount if the case goes to trial.
Remember, while the monetary cost of contesting a trust should most certainly be at the forefront of your mind, it’s also important to consider non-monetary costs, such as the emotional toll trust contests can take and the familial rifts that can be created by them. If you have a full-time job or children, you should also evaluate whether you’d have the time and energy to effectively litigate your trust contest.
To put it plainly, you should not impulsively jump into contesting a trust. Before pursuing a trust contest, it is crucial to carefully consider your legal options, discuss your plans with your loved ones, and most importantly, consult with a qualified lawyer.
If you are uncertain about your best course of action, we are more than happy to offer our two cents. But again, the ultimate decision of whether or not it’d be worthwhile to contest a particular trust would be up to you.
For many, the desire to honor their deceased loved one’s final intentions outweighs considerations about the cost of contesting a trust. For others, the cost of contesting a trust is a major deterrent. Every individual’s situation is unique, so only you would know whether contesting a trust would be the right choice for you.
Still have questions about the cost of contesting a trust? Touch base with our talented legal team today.
Are you thinking about contesting a deceased loved one’s trust? If so, it’s crucial you carefully consider the potential cost of contesting a trust before moving forward with your case.
By discussing the specifics of your case with our legal team, you’ll gain a clearer understanding of both the cost of a trust contest and the legal options that are available to you.
Our lawyers are experienced in litigating trust contests on both conservative and flexible budgets, and they are committed to working with you to achieve your legal goals while keeping costs manageable.
Discover how our skilled legal team can assist you by requesting a free consultation.
