Jim Bush, Partner at Keystone Law Group, discusses whether a decedent’s trust can be contested. Read the complete article below for more details. Click the YouTube “Subscribe” button to be notified when new videos are published.
Suppose a decedent executed a trust that left everything to their new spouse instead of their children, even though they had informed their children that they would be receiving most of their assets. Can a trust be contested on this ground?
Suppose a decedent executed an amendment to their trust that drastically altered its provisions after they’d been diagnosed with severe dementia. Can a trust be contested on this ground?
Contesting a trust in the scenarios mentioned above may not just be warranted but may actually be recommended.
In the former scenario, it may have been that the decedent’s surviving spouse had exerted undue influence on the decedent to cause them to drastically alter their trust to disinherit their own children, which had never been their intention.
In the latter scenario, the decedent may have altered their trust when they did not possess the degree of mental capacity needed to make such a change.
While several other grounds for contesting a trust exist besides undue influence and a lack of capacity, the two examples described in the preceding paragraphs are common fact patterns in trust contests.
If you are unsure about whether contesting a trust would be in your best interest, consulting with a trust contest lawyer could help you make a decision. A trust contest lawyer not only could inspect the trust instrument on your behalf, but help you determine whether you have the standing and grounds to contest a trust. We’ll cover what standing and the grounds for contesting a trust are in a later section of this article.
Before delving into the complex nature of trust contests, let’s review what a trust contest is.
What Is a Trust Contest?
A trust contest is a petition filed with the court that seeks to have a decedent’s trust — or the problematic portions of their trust — invalidated. The court will not invalidate a decedent’s trust without valid reason. In fact, the court generally defaults to upholding the provisions of a decedent’s trust unless it’s presented with a compelling reason not to do so.
It is not uncommon for beneficiaries to be dissatisfied with the inheritances they were left, but contesting a trust on this ground alone will not cut it. If you plan to contest a trust, you will need to prove with testimony and clear and convincing evidence why the trust at issue is not a reflection of the decedent’s true final intentions.
Determining whether your reason for contesting a trust is valid is not difficult since California only allows trusts to be contested on certain established grounds. Continue reading to learn more about the grounds for contesting a trust.
When Can You Contest a Trust?
Trusts can be complicated documents to navigate, but even more complicated to navigate are trust contests. As you start the process of contesting a trust, questions are likely to arise.
Can a living trust be contested? Can a trust be contested if you only wish to challenge a trust amendment but not the underlying trust? Can you contest a trust if you are not a beneficiary or heir? Can a trust be contested without help from a trust contest lawyer? What are the chances of successfully contesting a trust?
If you are asking these questions after learning you’ve been named as a trust beneficiary or successor trustee, you’re on the right path. Perhaps the trust in question contradicts the known final wishes of the decedent or leaves the majority of trust assets to non-family members.
Whatever the reasons are for your concerns, it is good you are asking these essential questions about contesting a trust. The more you know about trust contests, the better your chances of successfully contesting a trust will be.
What Are Valid Grounds for Contesting a Trust?
Suppose you were the caretaker for your parent throughout their life. Even after you created your own family, you kept your parent in your home and tended to their needs. Your siblings, on the other hand, barely ever visited your parent and never cared for them like you did. When your parent died, you were taken aback to learn your parent left you and your siblings equal shares of their trust. Can you contest a trust because you believe you are deserving of a larger inheritance than your siblings?
While it is unusual your parent did not leave a little extra for you, given your devotion to their care, a trust cannot be contested on this ground alone. On the other hand, if you discover that your siblings intentionally deceived your parent into believing they were struggling financially to be left a greater inheritance, you could have valid grounds for contesting your parent’s trust, particularly if they had changed a prior version of their trust to reduce your share.
Put simply, a trust cannot be contested because you feel you are deserving of a larger inheritance or perceive the trust’s provisions to be unjust. To give yourself the best chance at successfully contesting a trust, you must confirm your grounds for contesting a trust are valid.
You can do this by honestly asking yourself about your reasons for bringing a trust contest. Are you bringing a trust contest because you wish the trust provided you with more, or is it because the trust is flawed and fails to accurately represent the decedent’s known final intentions?
Remember, a trust contest lawyer can be a valuable resource if you require an objective analysis of your grounds for contesting a trust. Trust contests, just like will contests, tend to come with a high price tag, so consulting with a qualified trust contest lawyer prior to initiating a contest is crucial.
As we already mentioned, there are only a few established grounds for contesting a trust in California. They include:
- Undue Influence: Excessive persuasion was used to convince the decedent to make drastic changes to their trust that did not align with the decedent’s true intent.
- Lack of Capacity: The decedent lacked the necessary mental capacity to execute a trust when they did.
- Elder Financial Abuse: Abuse had been inflicted on an elderly decedent, which played a role in their signing or revoking a trust.
- Fraud: The decedent had intentionally been deceived into creating, changing or revoking their trust.
- Forgery: A trust had been fraudulently signed by someone other than the decedent.
- Mistake: The decedent executed a trust by mistake or was mistaken about the laws or facts surrounding the execution of a trust.
- Revocation: The decedent revoked their trust by executing a new trust, modifying their old trust or completely destroying the document.
Contesting a trust can be difficult if your reason for doing so falls outside the grounds mentioned above; nevertheless, speaking with a trust contest lawyer about your concerns is never a bad idea, as they will be able to provide you with a definitive answer as to whether contesting a trust is possible for you, and if so, what your chances of successfully contesting the trust might be.
Of course, to contest a trust, you will need to not only demonstrate that you have grounds, but that you also have standing. We dive into standing in the next section.
What Is “Standing” in Trust Contests?
Our trust contest lawyers are frequently asked, “Who can contest a trust?” Whether you can contest a trust comes down to something known as “standing,” which refers to whether the party seeking to bring the trust contest has a financial stake in the outcome of the matter.
To have standing in a trust contest, the trust at issue should provide you with a smaller inheritance than you’d receive if the trust were to be set aside. Conversely, if a trust being invalidated would mean you receive the same inheritance or a less substantial one, you would not have standing.
In most instances, parties with standing in trust contests include beneficiaries, beneficiaries under previous versions of the trust, and the settlor’s heirs.
What Are the Rules for Contesting a Trust in California?
Though it’s essential to have standing and valid grounds for contesting a trust. there are also some other rules you may wish to take into consideration. Continue reading to discover what they are.
Contesting a trust can be difficult if your reason for doing so falls outside the grounds mentioned above; nevertheless, discussing the merits of your case with a probate attorney is never a bad idea. Your attorney will be able to provide you with a definitive answer as to whether or not it would be possible for you to contest the trust at issue.
It is important to keep the time limit for contesting a trust in mind, because you only have 120 days from the date the trustee mails notification of administration to bring your contest. Of course, to contest a trust, you will also need to have standing, which we discuss in the next section.
Can You Contest a Trust in Its Entirety?
Yes, you can contest a trust in its entirety. In many instances, contesting a trust in its entirety may be the only logical course of action.
For example, if you are dealing with a trust that was created by a decedent with advanced dementia, it would make sense to try to have the whole trust instrument set aside.
Remember, to contest a trust on the basis of a decedent having lacked capacity, documentation from the decedent’s physicians, and perhaps even testimony from persons close to them, may be needed to corroborate your claim.
Can You Contest a Trust Amendment?
Yes, it is possible to contest just a trust amendment without contesting the trust that underlies it. Usually, trust amendments are separate legal documents that are executed at some point after the creation of the original trust.
Following this logic, you can see how a decedent could have had capacity when they executed their original trust, but lacked capacity when they executed their trust amendment.
What Happens to Trust Assets if a Trust Contest Is Successful?
If you can successfully demonstrate to the court that a trust is invalid, trust assets generally will be distributed in accordance with the provisions set forth by the decedent’s previous estate planning documents (so long as such documents exist and are valid).
If no prior estate planning documents exist, trust assets generally will become part of the decedent’s intestate estate and be distributed to the decedent’s heirs according to intestate succession laws.
Those who typically stand to inherit from intestate succession are the surviving spouse and children of the decedent.
What Are the Differences Between Contesting a Trust and Contesting a Will?
As previously stated, a trust can be set aside if you can compellingly demonstrate that a trust is invalid on account of it meeting one or more of the established grounds for contesting a trust. The grounds for contesting a will are basically the same as those for contesting a trust, with a couple exceptions that we’ll discuss below.
Contesting a Trust on the Basis of Capacity
To create a valid trust, a settlor must have what is known as contractual capacity, which is a higher degree of capacity than the capacity needed to create a will (called testamentary capacity). Trusts require a higher degree of capacity to execute or amend because they tend to be significantly more complex than wills.
To have contractual capacity, a settlor must understand the implications of creating or amending their trust. In other words, they should be able to grasp how their trust operates, what purpose it serves, who the beneficiaries are and how they’d be affected by the trust’s provisions.
Contesting a Trust on the Basis of Mistake
The conditions that must be met to set aside a trust on account of a mistake are substantially less rigid than the conditions that must be met to set aside a will on account of a mistake.
For example, a trust could be set aside if it can be proven the settlor was mistaken about any law or fact related to the instrument’s execution, whereas a will could only be set aside if it can be proven the decedent was mistaken about the nature of the document they were signing (i.e., they thought they were signing another type of legal document when they were actually signing a will).
For example, Keystone represented a client who was competent in her everyday life but was drugged by her son to make her execute an irrevocable trust, which contained the lion’s share of her assets and named her son as the sole trustee. The document was created by mistake, because she had been cognitively impaired when she created it, but when she regained capacity, she immediately was aware that she had signed away her most valuable assets. It was not difficult for Keystone’s trust and estate attorneys to prove to the court why the irrevocable trust should be set aside. If the client had created a will under the same circumstance
Contesting Non-Standard Trusts
On occasion, the answer to whether a trust can be contested is a little less straightforward. For example, can a trust be contested if it is unsigned? Can a trust be contested if the trust is irrevocable? Can a trust be contested if the instrument is handwritten? Can a trust be contested if it has a no-contest clause?
If you are dealing with a non-standard trust, the first thing you should do upon receiving a copy of it is to seek the help of an experienced probate lawyer, who can inspect the document and speak to you about your concerns to help you determine whether it would be possible and in your best interest to contest the trust at issue.
Continue reading to learn about common scenarios involving non-standard trusts.
Can a Trust Be Contested if It is Unsigned?
Most of the time, an unsigned trust is considered invalid by default, so you will not have to go through the process of contesting the trust to have it deemed invalid by the court. There have been instances, however, where an unsigned trust has served as proof of the settlor’s dispositive intent.
For example, Keystone represented the son of a decedent who was involved in a legal battle with the decedent’s surviving spouse over whether the decedent had created a valid trust leaving multiple parcels of real property to him. Keystone argued that a trust existed notwithstanding the fact that no one (including the son) had a copy of it, but the spouse assured that such a trust never existed. Keystone obtained testimony from the drafter of the trust, who both prepared the trust and saw the decedent execute it. Subsequent to the drafter’s deposition, the spouse produced unsigned copies of the trust. As a result, Keystone negotiated a settlement on terms similar to what its client would have obtained if he had successfully litigated this case through to judgment.
Can an Irrevocable Trust Be Contested?
While the contents of an irrevocable trust cannot generally be revoked or amended, especially not by the settlor, they can be contested on the same grounds that any trust can be contested — which ultimately can lead to the irrevocable being invalidated.
So the short answer is yes: an irrevocable trust can be contested.
Can a Trust Be Contested if the Instrument Is Handwritten?
Because, unlike wills, trusts do not pass through probate, the standards for trusts are substantially less stringent, and a handwritten trust will likely hold up in a court of law.
In fact, so long as a trust is in writing (whether typed or handwritten on a scrap piece of paper) and signed by the settlor, it generally would be considered valid. Witnesses are not needed, nor are notary acknowledgments.
Can a Trust Be Contested if It Has a No-Contest Clause?
A no-contest clause in a trust does not mean the trust cannot be contested; it simply means that there are risks associated with contesting the trust.
Let us explain. If a trust has a no-contest clause, and a beneficiary contests the trust and loses the contest, they risk having to forfeit their inheritance. On the other hand, if they were to win their contest, the no-contest clause would have no effect.
Just because there is a risk involved in contesting a trust with a no-contest clause, it does not mean you shouldn’t pursue a contest if you have a valid reason for doing so. It’s also worth noting that in recent times, no-contest clauses have become more difficult to enforce.
If you are considering contesting a trust with a no-contest clause, it is best to speak with a lawyer before proceeding further so they can evaluate the risks involved. In one particular case, trust beneficiaries forfeited $10 million by contesting a trust with a no-contest clause and losing their case.
FAQs: Contesting a Trust
We hope we’ve provided you with a helpful overview of what it takes to contest to trust. If you still have questions, our FAQs below may provide you with further insight. You also have the option of scheduling a free consultation with our knowledgeable team of trust contest lawyers
If my siblings are contesting a trust belonging to my parents, do I have to join their contest?
If you’re content with your inheritance, it may seem futile for you to join your siblings’ trust contest. Or, even if you’re not content with your inheritance, the cost of contesting a trust may not seem worth it to you. However, failing to join your siblings’ contest could jeopardize your inheritance.
When certain beneficiaries contest a trust and others don’t, the ones who don’t — we like to call them “freeloader beneficiaries” — basically lose their seat at the negotiating table. As a result, whatever settlement or verdict is reached may not take your preferences into account, or worse, it may reduce or eliminate your inheritance.
How much does it cost to contest a trust?
It is impossible to definitively say how much it would cost to contest a trust, since the price tag of a trust contest hinges on many factors, such as the value of the trust assets at stake and whether the case goes to trial.
A case that is tried in court will significantly add to the costs of contesting a trust, since trials require substantial preparation on the part of your legal team. Trust contests that go to trial could cost $100,000 or more.
On the other hand, a trust contest that is resolved early and outside of court at mediation could cost as little as $25,000.
By consulting with a trust contest lawyer, you can find out more precise estimates surrounding the cost of contesting a trust. You may also be able to learn from your lawyer whether it’d be possible to seek an award of your legal costs or if there are more budget-friendly options for securing the resolution you want.
Can non-beneficiaries be trust contestants?
Unfortunately, non-beneficiaries cannot usually be trust contestants unless they were named as a beneficiary in a prior trust or if they are direct heirs of the settlor.
Can a will override a trust?
Wills and trusts are separate instruments; trusts are intended to govern the management of trust assets, while wills determine how all other non-trust property will be distributed when a decedent dies through the formal probate process. If a will and trust executed at the same time contain conflicting terms, then a court will have to determine whether the decedent intended the terms of the will or those of the trust to govern.
If the decedent executed his or her will after executing his or her trust, it is technically possible for the terms of the will to override those of the trust, so long as the will meets the requirements of a valid revocation of the trust. In other words, the will must typically contain language expressly revoking the trust and meet any other requirements for revocation set forth within the trust itself.
Can a spouse override a trust?
It is usually not possible for a surviving spouse to override a trust, since the provisions of the trust instruct how trust assets should distribute, not the spouse.
That said, because California is a community property state, a surviving spouse is generally entitled to 50% of the assets acquired during marriage by either spouse. As such, a spouse’s community property rights could potentially impact a trust.
For example, if a decedent’s trust is disposing of more than their 50% of the community property, their spouse could potentially file a petition to recover from the trust her rightful share of the community property.
What happens when a trust is dissolved?
When a trust is dissolved, the successor trustee generally will distribute whatever assets remain in the trust to beneficiaries in accordance with the provisions of the trust.
If you’re a trustee, make sure to settle all of the trust’s outstanding debts and liabilities before making these distributions.
Once all the obligations of the trust are fulfilled, the trustee can proceed with terminating the trust.
Can a trust be contested after death?
Yes, a trust can be contested after the death of the settlor. In fact, that is when most trusts are contested. The only instance in which a trust could potentially be contested before the death of the settlor is if the settlor loses capacity during their lifetime.
Remember, a revocable trust cannot be contested if its settlor is alive and competent.
What is the California trust contest statute of limitations?
In California, prospective trust contestants only have 120 days from the date they received a trust administration notice to bring their trust contest.
The trust contest statute of limitations generally isn’t flexible unless you weren’t properly notified, so if you plan to contest a trust, make sure to act quickly.
How can I invalidate a trust?
If you’re asking how to invalidate a trust, it is the same as asking how to contest a trust. You would initiate the process by filing a petition to invalidate a trust. Once you do that, a court date will be set that you should attend with your trust contest lawyer.
Have questions about how to contest a trust in California? Call our trust contest lawyers today.
The chances of successfully contesting a trust are not very high, which is why trust contests are best navigated with help from a qualified trust contest lawyer.
If you are concerned a decedent’s trust does not reflect their true final wishes, Keystone’s trust contest lawyers can review the facts of your case, as well as the trust instrument, to determine your best course of action.
Call our trust contest attorneys today to schedule your free consultation
