4 Reasons to contest a trust

4 Reasons to contest a trust

Trusts are more than a structured financial advantage for the wealthy. Trusts are also used by people with modest means to protect assets from creditors, and save families and beneficiaries the expense and time associated with probate. The lengthy process of probate is required for wills, but is not required for trusts with clearly defined asset distribution to beneficiaries.


Contesting a trust

A trust is a legal arrangement between a grantor, the trustee, and the beneficiaries. The grantor is the party that provides the assets for the trust. The described assets are held ‘in trust’ by the trustee on behalf of one or more beneficiaries.

If a beneficiary or a trustee has any concerns about a trust, it may be contested for the following reasons:

1. Lack of mental capacity

One of the most common reasons for challenging the validity of a trust is if it is believed that the person who created the trust lacked mental capacity to understand the intentions of the trust and the distribution of assets to the beneficiaries. These cases often arise when a person making the trust has a condition or disease that affects their ability to think clearly. This lack of ability can be caused by Alzheimer’s diseases or dementia. Under California law, the mental capacity required to establish a trust is the same as for signing contracts. Reference: California Probate Code § 811

2. Suspected undue influence

Suspected undue influence may occur If it is alleged that someone has coerced the grantor to gain benefit or help others to gain benefit. It might seem out of character of the grantor to distribute the assets in a certain way and if you suspect that influence has been applied, you should seek legal advice.

California law defines undue influence as: “excessive persuasion that causes another person to act or refrain from acting by overcoming that person’s free will and results in inequity.”

3. Ambiguous terms or language

A trust may have ambiguous language. The interpretation of the trust might have significant impact on the way trust assets are distributed. If there is doubt in the way the grantor’s intentions are described, an interested party may challenge the trustee’s reading of the terms and bring the matter before a court for clarification.

4. Fraud

Fraud can be alleged if someone has given false information relating to a trust at the time of draft, or if the grantor relied on someone else’s false statement or misrepresentation of facts when deciding the terms of the trust. In cases of alleged fraud, it is possible to challenge the trust and have the document invalidated.  Fraudulent activity is varied, it might be possible that the grantor was not fully aware of the trust’s beneficiaries or asset distribution and signed the document without knowing the full extent of the trust’s intentions.

If you suspect similar problems with a trust, or just simply don’t fully understand the implications of a trust, contact Byron Husted, San Diego’s estate litigation attorney. Byron is experienced in estate planning, estate litigation, will and trust challenges, and probate.

Byron might suggest that your case is best managed firstly by mediation. Mediation is often less costly than court proceedings, and generally easier than litigation.

Contact Byron Husted today at Tel: 619 826 8060 or email at byron@morrislawfirmapc.com