Older couple discusses potential trust contest problems.

Three Trust Contest Problems Your Survivors May Face

If you have a living trust, or are considering getting a living trust in California, you might wonder what may happen to your trust after you pass on. You’ll probably want to know if someone can come along and challenge the trust — possibly getting a judge to set it aside, or causing your survivors to settle for less than you intended them to have. A California estate planning attorney can talk to you about specific trust contest problems that the beneficiaries of your assets might face. 

A trust contest happens when an heir,  beneficiary or other interested person asks a court to change the terms of a trust, or to throw out a trust, to ensure that the contestant will receive more assets from a friend, relative, or loved one’s trust agreement. Often the challenger was previously a legal heir to a larger share of the assets, or a beneficiary who had a larger share of the assets under a prior trust,  but will receive a smaller portion under the most recent version of the document.

Here are some of the more common reasons that people challenge a trust:

Capacity

You must be at least 18 years old to sign a trust agreement, but there is no age that is automatically too old to create a trust. The law generally presumes that adults are of sound mind, but certain facts can cast a shadow of doubt on a person’s legal capacity to understand who their natural heirs are and the legal ramifications of signing a trust agreement.

For example, there might be questions about capacity if the person who creates or changes a trust:

  • Has an official diagnosis of Alzheimer’s disease or another form of dementia. It is often best to have a medical authority certify that the person has legal capacity at the time that he or she signed the original or amended trust.
  • Has a mental illness. A mental health practitioner may determine and certify whether the individual had legal capacity when he or she signed the papers.
  • Is quite aged. For example, if your great-aunt is 104 years old, it may help her in some cases to have a medical expert evaluate and certify her capacity. 

It is often better to memorialize the mental state of the person to avoid problems down the road.  But you should consult with an experienced estate planning attorney before taking any action concerning an elder’s trust or other estate planning documents.

Undue Influence or Coercion

Unfortunately, some people use others for their own benefit. If someone exerts undue influence on a vulnerable person who makes a trust, and obtains a benefit from that undue influence, a judge can later set aside the trust on the grounds of undue influence because, but for the improper conduct, the person would not have signed a document with those terms.

Coercion (sometimes referred to as duress or menace) happens when someone threatens, bullies, or intimidates another person to cut a beneficiary out of a trust, reduce the person’s share, or give assets to an individual through the trust. Similar to undue influence, coercion involves depriving the person signing the document of his or her unfettered free will.

Fraud or Forgery

It is fraud when someone deceives another person into signing a trust instrument. The signer might be misled to believe, for example, that the document is something other than a trust, like an insurance form. Also, fraud can happen when someone tricks the signer into changing the terms of a trust based on false or misleading information, such as misleading the signer to believe that his sole heir, such as a child, is dead, or by falsely asserting that the child abused or abandoned the signer. 

Fraud can be a crime, such as when a document is forged. Forgery is when someone fabricates or alters a document, for example, typing up a trust agreement and forging someone else’s signature on the papers. If you can prove fraud, a judge can void the trust.

A California estate planning attorney can explain your options for protecting your estate from a frivolous trust challenge. You set up your trust and estate planning documents to provide for your loved ones. Contact us today for a consultation. You do not want someone to be able to countermand your wishes and take away the assets you planned to give to your beneficiaries.