A living trust is a good way to avoid probate and keep family finances private, but sometimes it becomes necessary to challenge a living trust. It can be much more difficult to contest a living trust, because the settlor, the person who made the trust, is still alive.
However, sometimes this is unavoidable. The Superior Courts of California lists three common reasons that a trust might be challenged:
- Undue influence was put on the settlor in creating the trust.
- The settlor was not competent at the time the trust was created.
- A person who helped the settlor set up the trust would benefit from the trust (but who may not necessarily be included.)
Often enough, situations change over time. The settlor remarries or has children, which make it necessary to change the trust. If the settlor can do this on his own, then no contest is needed. However, if the settlor is no longer legally capable of making decisions, the trust may need to be challenged.
Another type of challenge to a trust is when the trustees are acting improperly. They are not handling their fiduciary duties to the trust. Many times, this occurs when the trust is passed to another generation, but it can occur in the context of a living trust. This is a complex situation which may also require an attorney.
The Superior Courts recommend talking to an experienced lawyer before challenging or contesting a living trust. If you lose a challenge brought against a trust, you may also lose your right to receive property from that trust. You should read through the trust very carefully and make sure you have the evidence which will back up your claim. Legal disputes over trusts are quite common and often involve high dollar amounts. It is important to look at all the facts and your options before moving forward, because a dispute can be financially and emotionally devastating for the family.