Key Takeaways

• Contesting a trust may be a necessary process if one suspects that the interests or intentions of the trust creator have been negatively impacted or altered in the trust document.
• Trust contests can complicate family dynamics and lead to disputes that delay the trust administration process.
• Although they can be negatively received by family members, a trust contest can be important for protecting the wishes of the trust creator in cases of fraud, undue influence, trustee mismanagement, and more.
• The support of a skilled trust litigation attorney is crucial for navigating a trust contest and achieving a successful result sooner rather than later.

Introduction

Whether it’s a family member believing that they had a right to a larger share of an inheritance or that someone else influenced the trust creator to create a fraudulent document, trust contests are a daily occurrence for trust attorneys. Well-intentioned trust contests are valuable for protecting the interests of the trust creator and the beneficiaries they identified in the trust documents.

If you believe that a trust was written unfairly, was the product of undue influence, fraud or incapacity, or that it is being managed improperly, you should contact an attorney as soon as possible. Although a trust contest is often meant to protect the trust and the wishes of its creator, not all parties may agree that a contest is necessary, so it’s important to recognize the impact it can have on your family relationships. 

The family dynamics involved in a trust contest cannot be overlooked, as disputes during the administration of a family member’s trust can have lasting impacts beyond the administration of the trust. Understanding what steps to take to mitigate disputes and how to address those that do arise is vital for minimizing the effects they may have on family dynamics.  

Understanding Trusts and Trust Disputes

A trust contest is a legal process for removing invalid provisions of a trust that were affected by factors like fraud, undue influence, coercion, or other irresponsible actions. In order to contest a trust in the probate court, an individual must be an interested party in the trust—an interested party is any individual who has a financial stake in the outcome of a trust.

This party must then have grounds to contest a trust. To have grounds to contest a trust, this person must have a valid reason to believe that the trust should be invalidated. An individual cannot contest a trust purely because they are unhappy with its terms. Reasons for contesting a trust can range from vague provisions in the document to beneficiaries believing that the trustor was not in the right state of mind to create the trust in the first place.

Reasons for Contesting a Trust

Below are the most common factors that provide grounds for contesting a trust before the probate court.

Misinterpretation of Trust Terms

Beneficiaries or other interested parties in a trust may contest a trust on the grounds that it is either vague or difficult to interpret. If there is any ambiguity or confusion surrounding the terms of a trust, guidelines for asset distribution, or the validity of the trust, beneficiaries can pursue a contest to clarify its terms. A trust contest will involve a careful review of the trust’s terms, consultation with the trustee to understand the trustor’s intentions, and, if necessary, mediation to address the dispute amongst interested parties.

Violation of Fiduciary Duty

A trustee has a fiduciary duty to act in the best interests of the trust creator and their beneficiaries throughout the management of the trust. When a trustee fails to do so by engaging in either misconduct or negligence, it is known as a breach of fiduciary duty. 

Common examples of violating a fiduciary duty include: 

• Self-dealing – Self-dealing occurs when a trustee uses trust assets for their own personal benefit.
• Lack of communication – A trustee is expected to maintain consistent communication with beneficiaries throughout their administration of a trust, and failing to do so could be a breach of their duties.
• Negligence – If a trustee is negligent in upholding their duties, it may result in legal fees or potential fines levied against an estate.

Any of these actions could be grounds for beneficiaries to contest the administration of a trust. In severe cases, beneficiaries may even seek trustee removal in order to dispute the administration of a trust’s assets. 

Alleged Incapacity of the Trustor

Testamentary capacity is a crucial element in establishing a valid estate plan, meaning that a trust creator must have the ability to understand the decisions they are making and the consequences of their actions. If they lack the capacity to understand these decisions, their trust can be contested and invalidated. 

If an individual may have had a cognitive condition that prevented them from understanding the consequences of their actions, any estate plan they created could be invalidated on the grounds that it does not reflect their true intentions. For example, conditions such as dementia may cause a lack of capacity and prevent an individual from making rational and legally enforceable decisions when developing their estate plan. 

Discovery of Fraud or Undue Influence

Fraud and undue influence are some of the most common reasons for contesting and invalidating a trust. Fraud occurs when someone wrongfully alters the terms of an estate planning document or forges a signature on a will. Meanwhile, undue influence occurs when an individual is wrongfully pressured or coerced into changing their estate plan. In either case, such influence would mean that the content of the trust does not reflect the trustor’s true wishes, paving the way for the affected portions of the trust to be invalidated.

Legal Rights of Heirs and Beneficiaries

Some heirs and beneficiaries have specific rights that cannot be overridden by a trust, which can cause disputes among beneficiaries and lead to a trust contest. For example, if a trust creator attempts to exclude their spouse from receiving a share of an inheritance, the spouse may contest the trust on the grounds that they should have an entitlement to this property. 

In California, the surviving spouse of a decedent has a legal right to 100% of community property and a percentage of separate property, depending on the number of children they had. Similarly, in Texas, which is also a community property state, a spouse is entitled to 100% of community property and an equal percentage of separate property as the decedent’s children. 

These beneficiary entitlements can often not be overridden by a trust, regardless of the instructions listed in the trust document. Even if a spouse or child is unintentionally excluded from a trust, a situation in which they would be known as a pretermitted heir, they may also be entitled to an inheritance under state law.

Navigating No-Contest Clauses

The implementation of a no-contest clause may cause particular difficulty in seeking to initiate a trust contest. A no-contest clause is a provision that can be added to a will or trust to discourage frivolous legal challenges, stating that an individual who pursues a contest may be disinherited from the trust or will.

However, not all no-contest clauses may be enforceable or result in disinheriting the individual pursuing the contest. In some cases, a probate court may overlook a no-contest clause as long as the trust contest was initiated with valid grounds and without frivolous intent. 

If you are interested in contesting a trust but there is a no-contest clause in place preventing you from doing so, then you should consult a trust contest attorney as soon as possible. An attorney will help you understand the options available to you and guide you toward your best path forward.

Emotional Implications in Trust Contests

Although emotions are hard to quantify in the legal landscape, you should never overlook the implications of a trust contest on the emotions of the interested parties in the matter. In our experience, emotional issues and concerns usually predate the loss of a loved one and the decision to contest a trust. Those emotional issues, and the divisions they can create in families, can sometimes be exacerbated by the filing of a trust contest.

Breakdowns in communication and trust disputes are more likely in cases of already-strained family relationships. Navigating legal challenges and negotiating solutions is much simpler when there is an open line of communication. 

In some cases, family members may take a trust contest as an act of betrayal. Often, a trust contest is carried out in an effort to ensure that the wishes of the trust creator can be followed, which, in theory, is a net positive for all involved. However, family members who stand to benefit more from the current writing of the trust may object to a contest being filed. 

All in all, these emotional implications may be difficult to overcome, but addressing the conflict as soon as possible and fostering open communication is crucial to minimizing damage to family relationships. A meaningful discussion with a trust litigation attorney can help you understand the best path forward for addressing and resolving the disagreement. 

Role of Trustees in Managing Disputes

Trustees are often the first line of support in managing disputes, as they are tasked with ensuring the successful administration of a trust. Resolving disputes so that the trust administration process can continue smoothly is an important part of this responsibility. 

It’s crucial that the trustee remain neutral in managing any disputes, refusing to take sides with any specific party based on their interests alone. In seeking to resolve the dispute, the trustee should use the instructions laid out in the trust instrument and their understanding of the trustor’s wishes to guide their steps.

It’s important that trustees avoid the most common mistakes in trust disputes, which include:

• Showing bias in favor of select beneficiaries
• Failing to act swiftly 
• Failing to engage professional legal support
• Being unaware of their responsibilities in conflict resolution

Although a trustee is tasked with the responsibility of settling trust disputes, it does not mean they have to be tasked with doing it alone. If a dispute arises, it is advisable for a trustee to engage the support of a trust litigation lawyer who can offer support in determining the best path forward and seeking an amicable resolution.

Mitigating Family Tensions

After the death of a family member, emotions are obviously running high, creating a tense environment that poses the risk for disagreements and family trust disputes. Maintaining clear and transparent communication is a crucial first step to avoiding tensions during every point of the process, from estate planning to the administration of the trust. 

It’s also important to get in front of family tensions whenever possible to avoid trust disputes. If there are any unresolved issues or conflicts between family members due to a complex history, it’s important to address these as well in order to prevent these conflicts from bleeding into trust administration. 

For example, a past disagreement and bad blood between two siblings could lead to a dispute during the trust administration process if one sibling believes that the other should not be entitled to as large of a share of an inheritance. In such a case, it is advisable to address the conflict swiftly—if necessary, professional support can be a valuable resource. 

Professional Support and Guidance

Trust disputes can be complex and a time-consuming process, so it’s a good idea to engage professional support whenever possible. You should contact a trust attorney as soon as you suspect a dispute in the administration of a trust. Seeking the support of an attorney as soon as possible increases the chances of a quick resolution and the ability to address concerns before they get out of hand. 

To resolve disputes or family dynamics during the trust administration process, or address complicated family dynamics earlier and before they turn into disputes, you may also consider engaging the support of a family counselor. Counseling may be an option for bringing parties together in a comfortable environment and helping address the overarching concerns that may result in the trust dispute. A professional counselor may be able to alleviate the emotional strain of complicated family dynamics by getting ahead of drawn-out disputes.

Steps to Resolve Trust Disputes Amicably

If a dispute does arise, there are several steps you can take to resolve the issue as soon as possible and with the intent of minimizing a disruption to family relationships. Often, alternative dispute resolution methods are the best approach to preventing disputes from becoming contentious. 

Mediation

Because litigation is time-consuming, costly, and disruptive, it is often the most likely to fracture family relationships. Mediation of estate disputes is one of the most valuable steps in resolving a conflict without contentious litigation. This approach brings all parties to the table for the opportunity to present their side in search of a mutually agreeable resolution. If all parties enter the process with an open mind and a desire to hear out the other side, it has the potential to bring forth a resolution without the stress of litigation.

Arbitration

If mediation and negotiation are unsuccessful in achieving a resolution, another option may be an arbitration hearing. Arbitration is a more formal process where both sides present their case, and a third-party arbitrator provides a ruling that acts as a legally binding decision for each side to follow. 

An experienced probate litigation attorney can help you navigate either of the above processes. Litigation is often a last resort after mediation or arbitration fails to yield a successful result. An attorney’s goal is to assist you in seeking a resolution and securing access to a rightful inheritance as soon as possible in a friendlier environment than litigation.

Navigate Trust Contests With RMO Lawyers

Trust contests can lead to escalated family disputes that run deeper and result in unfortunate circumstances, potentially damaging family dynamics in the long term. If you are facing a dispute or contest related to your family’s trust, it’s advisable to consult a skilled attorney as soon as possible.

The trust litigation attorneys at RMO have decades of experience in successfully navigating family trust disputes. Our attorneys take the time to understand your unique case and the family dynamics involved so that we can seek the best possible outcome for all parties involved. We’ll remain sensitive to the emotions involved in your case in order to seek a resolution as soon as possible.

Schedule a consultation with the attorneys at RMO to discuss your case and determine the next steps.

Glossary

Trustor – An individual who creates a trust to be followed upon their death, explaining their wishes for the distribution of their assets to relevant beneficiaries.

Trust Contest – A legal process in which a party challenges the validity or terms of a trust in a probate court.

Fiduciary Duty – The legal responsibility of an individual to act in the best interests of another party while maintaining good faith and acting responsibly in legal decisions and during the management of property and financial assets.

No-Contest Clause – A provision in a will or trust that discourages beneficiaries from contesting the document by penalizing them if they do.

Testamentary Capacity – A testator’s ability to make sound financial and legal decisions at the time of the creation of their will.

Undue Influence – When an individual asserts influence on a vulnerable person to the degree that the compromised person’s estate plan is overcome, often to make changes to their estate planning documents, retirement and insurance policy beneficiaries, bank accounts, and real property, for their own personal, unfair gain.