How To Contest A Trust

While contesting a will is a concept many are familiar with, most people actually are unaware of the fact that a trust can be also be contested under specific circumstances. A trust that has been contested successfully can either be modified or terminated – depending on the situation.

What Is A Trust?

Simply put, a trust is a legal document which enables an individual to name another person to hold a particular property on behalf of a third party. In this context, the individual who makes the trust is the settlor or grantor, the individual who has been named to the trust assets is the trustee, and last but not the least, the individual who stands to benefit from the entire arrangement is known as the beneficiary.

It is the grantor’s job to establish the terms for managing the trust property as well as the income that is generated from it. The trustee, on the other hand, has a fiduciary role and is obligated to fulfilling certain legal duties by following the instructions set by the grantor.

In order to be able to contest a will, there is a wide range of criteria that need to be fulfilled. In case of trusts, the criteria are fewer but very strict. First of all, any individual who wishes to modify or terminate a trust must be a beneficiary of the trust. The individual must also have a strong and irrefutable reason to contest the trust.
Other factors that influence the ability of a person to contest a trust includes a specific statute of limitations under state law or the Uniform Probate Code which places a restriction against contesting till the passage of a certain period of time – say 2 years after the death of the settlor.

Question of Forfeiture

According to the provision laid down in some trusts, the beneficiary who contests the trust will have to forfeit any portion that he/she was entitled to. However, many states today have enacted separate laws which invalidate such provisions when the beneficiary has a valid cause to contest the trust.

Reasons For Contesting, Modifying Or Terminating A Trust

Revocable trusts can be modified by the grantor at any point in time as long as he/she is alive – the trust will become irrevocable only after the death of the grantor. Once the trust becomes irrevocable, it can only be modified if it has been successfully contested. There are several reasons why a beneficiary can choose to contest a trust:

The Trust Does Not Reflect The Settlor’s Real Wishes

This is one of the the most common reasons for trusts getting contested by beneficiaries. Beneficiaries who feel that the trust does not reflect the real wishes of the settlor can make numerous allegations, including (but not limited to) the settlor being pressurized by someone else to create the trust in a specific way (undue influence), or fraud or duress on the part of the settlor him/herself. Undue influence implies that the possibility of the settlor being pressured by a beneficiary into making the trust in a specific way – with the sole aim of benefiting him/herself. This “pressurizing” may have included otherwise unlawful tactics such as threatening the settlor, withholding vital resources and/or manipulating the settlor into staying isolated from his/her family members. Fraud, on the other hand, occurs when the settlor him/herself was unaware of the fact that the signed document was, in fact, a trust.
If any of these circumstances are found to be true, the court will immediately make provision to modify the trust, and even terminate it if needed.

A beneficiary can also make an allegation that the trust is not reflecting the real wishes of the settlor, due to the lack of capacity of the settlor him/herself to form a trust. In the event that the court finds that the settlor him/herself was unaware the provisions of the trust or even the fact that he/she was making a trust in the first place, or if the settlor was not sound of mind during the time of creation of the trust, it can arrange to modify or even terminate the trust.

The Trust Is Not Serving Its Original Purpose

Sometimes, issues arise due to unprecedented change in circumstances. In some situations, for instance, the settlor might have established a trust keeping a certain goal in mind, but the present realities may actually prevent the trust from serving its intended purpose. This usually happens when the beneficiaries receive little to no benefit from said trust which in turn makes the cost(s) of administering the trust would be much more than the benefits received.

Sometimes, the trust itself contains language which can help in its modification or termination. If not, a beneficiary can seek to extinguish the trust by petitioning the court.

The Language Used In The Trust Is Ambiguous

If the language that has been used in the trust is poorly-written or dubious, the trust may be subject to varying interpretations by the trustee and the beneficiaries. Under such circumstances, the beneficiary may seek to petition the probate court to modify or even terminate the trust and thereby give a declaratory judgment of the settlor’s real intent.
If the court determines that the language used in the trust has no scope of ambiguity, the trust will remain firmly in effect. On the other hand, if the court does find that the language used in the trust is indeed ambiguous, it will begin to make further investigations to determine the real intentions of the settlor with the help of additional information such as the communications and personal history between the grantor and beneficiaries. The court will thereafter determine the way the trust will be treated with the help of the testator’s believed intent.

Importance Of Legal Assistance In Contesting A Trust

Any individual who wishes to contest a trust must be able to give the probate court a solid reason as to why the trust should be modified or terminated. In order to be able to do so, they must consider hiring a certified and qualified attorney who is experienced in managing probate litigation and can expertly handle the situation both inside and outside the courtroom. The probate attorney will also serve to explain the rights of the individual and the options that he/she has to bring forth a petition and contest the trust.

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