Trusts are a frequently used estate planning tool that many parents include to preserve and distribute assets to their heirs and other beneficiaries. Although trusts also ensure that loved ones avoid the stress and hassle of the probate process, many inheritance distributions from assets held in trust lead to lawsuits known as trust contests.
Probate courts in California generally allow a trust contest if there is credible evidence of foul play when the trust was created by the trustmaker or administered by the trustee. Below, our knowledgeable probate lawyers explain what you need to know about contesting a trust in the state of California.
On What Grounds Can a Trust Be Contested?
Most trust contests result from the following situations:
- Intent: Beneficiaries of the trust can file a lawsuit claiming that another party exerted undue influence over the settlors and manipulated them when the trust was set up. The same goes when suspicious changes are made to the trust document under duress or if beneficiaries suspect there was a bad actor who was trying to manipulate their parent or elder.
- Ambiguity: If the trust language is ambiguous and difficult for the beneficiaries and the trustee to interpret, the beneficiary can petition the probate court and request the trust be modified or a judgment declared elaborating the settlor’s intent.
- Purpose: If current circumstances prevent the trustee from administering the trust as specified in the trust document, the beneficiaries can move to dissolve the trust. In some cases, the trust provisions might allow the beneficiaries to dissolve the trust.
- Lack of Legal/Mental Capacity: If the beneficiaries can prove the settlors lacked sufficient mental capacity when they executed the trust, then the beneficiaries can argue that the court should invalidate the trust. Medical conditions like Alzheimer’s, strokes, and dementia are all suitable reasons for claiming lack of mental/legal capacity.
- Fraud: If another party forged or doctored the trust documents, the trust can be contested and criminal charges can be filed against the party who committed wrongdoing.
How Do You Dispute a Trust?
To begin, you should consult with an experienced trust contest attorney, who can guide you through this complicated area of law and examine the facts of your case. You will have to file a petition with the county court where the trust is being administered within the set deadline under the Notice of Administration. If you miss that deadline, you can no longer pursue a claim.
Can Only Family Members Contest?
Beneficiaries of the trust who aren’t related to the decedent and receive a Notice of Trust Administration can also contest the trust.
How Long Do You Have to Contest a Trust?
The deadline to contest a trust is triggered by the date the Notice of Trust Administration is mailed. Heirs and beneficiaries of the trust have 120 days from the date the notice is mailed to contest. If the notice does not contain a copy of the trust, then you must ask for a copy, but you still only have 120 days to contest. If a copy is sent to you within the 120 days, you have 60 days from the date the trust copy is mailed to you to contest.
How Much Does It Cost?
Contesting a trust is just like filing any other lawsuit, it will cost money and depend on the type of fee structure you work out with your attorney. If the contest settles early, it can be relatively inexpensive. But if the contest is drawn out over months or years, then the cost can reach tens to hundreds of thousands of dollars or more, depending on the nature of the trust contest.
What Happens When Someone Contests a Trust?
If you decide to challenge a trust on the basis of fraud, duress, lack of mental capacity, or undue influence, and the court rules that you lack probable cause or credible evidence, then you can lose your right to receive benefits from the trust, if there is a no-contest clause. If the trust contest is successful, the court will invalidate the trust or set aside a trust amendment. Courts can also remove a trustee for breach of trust, taking excessive payments, or if they rule the trustee is unfit to fulfill their legal obligations.
What If There Is a No-Contest Clause?
A "no-contest clause" is designed to discourage disgruntled parties from contesting your trust after you pass away. A "no-contest clause" states that if anyone mounts a legal challenge and ends up losing, they won’t receive any form of inheritance from the trust. Essentially, if a beneficiary sues and loses, the no-contest clause means they won’t get a penny.
Under California Probate Code § 21311, a no-contest clause can only be enforced against the following types of contest:
- A direct contest brought without probable cause
- A pleading to challenge a transfer of property on the grounds that it was not the transferor’s property at the time of the transfer
- The filing of a creditor’s claim or prosecution of an action based on it
Speak to Us Today If You Need to Contest a Will in California
At the Law Office of Mitchell A. Port, we possess more than 35 years of practical experience in this complicated area of law. Our esteemed legal professionals understand the complex laws and regulations governing trusts, and we are equipped with the extensive resources that you need in your corner to protect your best interests and advocate for your rights.
For a free phone consultation with our legal team, please call (310) 526-3433 or contact us online today.