When siblings contest a trust, a thoughtful and strategic approach is generally required to reach a resolution.
Suppose a decedent’s trust names all the decedent’s children as equal beneficiaries. However, due to the care certain siblings provided the decedent in the final years of their life, they believe they are entitled to a greater inheritance than the other siblings and are contesting the trust as a result.
As trustee, you must decide whether to defend the trust contest or allow the siblings to resolve the contest amongst themselves. If you were to defend the contest, the siblings who are contesting the trust could accuse you of violating your duty of impartiality. If you were to abstain from participating, the siblings who are not contesting the trust could accuse you of failing to carry out the trust’s terms.
In this particular situation, you would most likely be advised to defend the trust. The siblings who are contesting the trust ostensibly have a frivolous case. They may believe they are deserving of a greater inheritance for the contributions they made to the decedent’s care, but this does not qualify as a valid ground for contesting the trust.
Thoroughly considering the potential consequences of your involvement in a trust contest is extremely important, as taking the wrong action could result in you being sued for breaching your fiduciary duties. Therefore, if you are uncertain whether to defend a trust contest by siblings, consulting with an experienced trust dispute attorney is highly recommended.
Can a Sibling Contest a Trust?
Whether a sibling can contest a trust depends on whether or not they have standing.
To have standing to contest a trust, a sibling must have a financial stake in the outcome of the matter. In other words, if a sibling winning their trust contest would mean they receive a greater inheritance than the inheritance they are receiving currently, they have standing.
For example, a sibling would have standing to contest their parent’s trust, even if they were excluded from it, if their parents had no prior estate planning documents because the sibling is a direct heir who could inherit by way of intestate succession if the trust were to be invalidated.
If you are unsure whether you or your siblings have standing to contest a trust, a trust contest attorney can provide guidance.
Can a Sibling Contest a Beneficiary of a Trust?
Although a sibling cannot contest a trust beneficiary directly, it may be possible for them to contest the provision of the trust that names the beneficiary they wish to contest, but only if they have standing.
Put simply, a trust contest is brought to invalidate a trust instrument or certain provisions within it, not its beneficiaries.
5 Important Considerations for Trustees When Siblings Are Contesting a Trust
Contesting a trust is inherently complex. However, there may be an added layer of complexity for trustees, because they must act impartially and in the best interests of all the beneficiaries, which can be challenging when a contest pits one group of beneficiaries against another.
For this reason, if siblings are contesting a trust, you must carefully consider the ramifications of defending the trust, as failing to do so could result in you being suspended, removed or surcharged.
Avoid breaching your fiduciary duties by considering the following five factors when faced with a trust contest brought by siblings.
1. Conflicts of Interest
If your siblings are contesting a trust that you both oversee and stand to inherit from, defending or joining their trust contest may pose a conflict of interest, particularly if the outcome of the contest could affect your inheritance.
Put simply, even trustees who are beneficiaries are obligated to treat all the beneficiaries equally. Prioritizing your best interests or the interests of certain beneficiaries over the collective best interests of the beneficiaries may be regarded as self-dealing or favoritism, respectively, which wouldn’t just be a violation of your duty of loyalty but a violation of your duty of impartiality as well.
Therefore, when there is a conflict of interest, it generally would be advisable for you to abstain from participating in the trust contest. If a trustee’s participation is necessary, it may be possible to seek appointment of a neutral trustee to defend the trust on your behalf.
2. Grounds
Assuming siblings or another interested party are contesting the trust as a whole, they must have valid grounds for seeking to have the trust instrument invalidated. If they don’t have valid grounds, their trust contest may lack merit. In such an instance, it is likely our duty to defend the trust contest.
It is crucial you familiarize yourself with the grounds for contesting a trust so you can easily gauge whether a trust contest by siblings has been brought for the right reasons.
Valid grounds for contesting a trust in California include:
- Undue influence: Someone manipulated or applied excessive pressure on the decedent to create, amend or revoke their trust.
- Fraud: Someone intentionally deceived or misled the decedent to create, amend or revoke their trust for personal gain.
- Lack of capacity: The decedent lacked the capacity required to create, amend or revoke their trust.
- Forgery: Someone falsified the decedent’s signature on the trust instrument.
- Lack of due execution: The trust creator failed to follow established procedures to execute their trust.
- Mistake: The trust creator was mistaken about a law or fact related to the trust instrument that caused the instrument to deviate from their intentions.
- Revocation: The trust creator previously revoked the trust, rendering it invalid.
Knowing these factors is crucial to planning a successful defense to a trust contest brought against the trust by siblings or any other interested party. A trust attorney can be consulted if you are having trouble determining whether any of these grounds apply to a particular trust.
3. Cost Benefit
If you must litigate in order to protect the trust, you are typically permitted to use trust funds to cover your legal costs.
That said, the cost of contesting a trust is not insignificant, so it’s important to consider the financial impact your decision could have on the trust. Where the cost of litigating a contest would sap the trust of much of its value, it usually makes sense to explore resolution of the dispute prior to litigation, or early in the litigation process, if that option presents itself.
4. Risks
Just like contesting a trust may come with risks, so could defending a trust. For this reason, before deciding whether to defend a trust contest by siblings, it’s important to consider whether the siblings’ claims have merit.
For example, if siblings are contesting a trust because they have compelling evidence to show the decedent had been unduly influenced by another beneficiary to amend their trust, expending significant funds litigating a contest may be imprudent.
If you are unsure how meritorious beneficiaries’ claims are, or whether you should defend them, a qualified trust lawyer can provide guidance.
5. Judicial Guidance
As trustee, your No. 1 priority is upholding your fiduciary duties. If a trust contest by siblings is so complex that it is unclear what course of action would be in the best interests of the trust beneficiaries, you always have the option to seek guidance from the court on how to proceed.
Although seeking judicial guidance could prolong litigation, and, by extension, trust administration, it may protect you against personal liability. Suppose you are uncertain as to whether the trustee should participate in a contest brought by a sibling against a trust amendment.
To uphold your fiduciary duties and maintain harmonious relations with the beneficiaries, it may be best to seek the court’s input before participating in the contest. Of course, if you are working with a skilled trust contest lawyer, they may be able to advise you in place of the court. However, in extremely complex cases, even a lawyer may suggest that you seek formal judicial guidance.
FAQs: Siblings Contesting a Trust in California
Are you still having trouble deciding how to handle siblings contesting a trust? Check out our frequently asked questions section below. If you’re unable to find the answers you’re looking for there, you can always contact our firm for personalized legal guidance.
Can siblings contest a trust with a no-contest clause?
Yes, siblings can contest a trust with a no-contest clause so long as they have standing. Contrary to popular belief, no-contest clauses don’t preclude contests; they just place beneficiaries at risk of being disinherited if they lose their contest.
That said, no-contest clauses have become exceedingly difficult to enforce in recent years, so if you are seeking a beneficiary’s disinheritance for contesting a trust that contains one, it would be advisable to work with a skilled trust contest lawyer to do so.
How long do siblings have to contest a trust?
Interested parties have 120 days from the date they are delivered notice by the trustee or 60 days from the date they are provided a copy of the trust instrument during that 120-day period, whichever is later, to contest the trust.
Are siblings always entitled to inherit from their parents’ trust?
No, siblings are not always entitled to inherit from their parents’ trust. They only would be entitled to inherit from their parent’s trust if they specifically were named as beneficiaries.
Can siblings contest a will?
Yes, siblings can contest a will if they have standing. The rules for contesting a will are largely the same as the rules for contesting a trust.
Still have questions about siblings contesting a trust?
Navigating family disputes over a trust can be challenging without proper legal support.
Because Keystone exclusively specializes in probate litigation and administration, our attorneys have the experience and expertise needed to effectively resolve even the most complex family disputes involving trusts.
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