Newport Beach Trust Contest Attorney

Newport Beach Trust Contest Lawyer

Estate planning is a way for individuals to continue to provide for their families or other beneficiaries before or after their death. One way to do this is through the establishment of a trust, which is a structured dissemination of assets to designated beneficiaries through an executor. However, trusts are susceptible to mistakes. If you need to contest a trust, a Newport Beach trust contest attorney can provide you with legal guidance.

At Ross Law Group, APC, our attorneys understand how complicated trusts can be. While they’re useful estate planning tools, they can be confusing, poorly constructed, or mishandled. Our team recognizes the devastating impacts these mistakes can have on beneficiaries. Our Newport Beach defense lawyers can defend their rights and resolve these mistakes so beneficiaries can correctly honor the wishes of their loved ones.

What Is a Trust?

Trusts are legal documents that establish how assets a person owns should be gifted to beneficiaries they designate. The assets are held in the trust until an established time or until certain conditions outlined in the trust are met. They are then distributed to the named beneficiaries in the manner by which the trust identifies. There are several types of trusts that can be established:

• Living trust. This type of trust is created and established while the trustee is still living. These types of trusts do not have to go through the probate process.
• Testamentary trust. These types of trusts are established within a person’s will and, therefore, must go through a probate process.
• Revocable trust. Once established, these trusts can be voided at any time by the trustee and for any reason.
• Irrevocable trust. The opposite of a revocable trust, once established, these trusts may not be altered or voided by any party or for any reason.
• Spendthrift trust. These trusts establish specific time parameters by which beneficiaries and creditors must abide before they are able to access the trust.

Each type of trust has its advantages and disadvantages, and a trustor must determine which type of trust is right for the purposes it will be used for. When establishing a trust, not only will the beneficiaries be named, but the trustee, the person who will oversee the trust, will also be appointed to ensure it is properly carried out.

Because a trust is a legal document, it must meet certain requirements to be legally sound, specifically, the following three areas:

• There must be a written declaration of intent for the purpose of the document.
• Any personal property that has a title or deed must be signed over to the beneficiary as a part of the trust.
• The trust must contain a minimum of one beneficiary.

Trusts are often the preferred route for those individuals who wish to structure the distribution of assets to their beneficiaries, those who wish to avoid the probate process, and those who wish to avoid public estate plans.

What Are the Rights of a Beneficiary of a Trust?

Naming beneficiaries in a trust provides those individuals with rights that are often overlooked. While a beneficiary is not entitled to more assets than what is named in the trust, they still have rights in its execution and in questioning the legality of the trust. Additional rights are provided within the legal structure and wording of the trust. However, the rights granted to the beneficiaries are determined by the type of trust.

• Revocable trusts. Because these trusts are able to be changed or revoked after they are established, the beneficiary has few rights granted to them. Under these types of trusts, beneficiaries are one of the areas that can be modified, meaning a person can be removed completely.
• Irrevocable trusts. These types of trusts grant beneficiaries many rights. Unless provided in a court order, these trusts cannot change once established. Common rights include receiving and seeking information specifically about the trust, information that assures the trustee is staying ethically true, and information that proves the trust is being managed responsibly.

Beneficiaries who are already receiving distributions from an established trust also have rights. These rights include:

• Receiving distributions as outlined in the trust
• Receiving information about the trust for the purposes of enforcing their rights
• Receiving financial account information pertaining to the trust that includes income, expenses, and distributions
• The right to contest a trustee’s administrative handling of the trust if they feel it is not being done properly

These are not all of the rights granted to those named in a trust, but they are among the most commonly recognized. A less commonly known right is the right for a beneficiary to terminate the trust. This can only be done if the beneficiary is able to reach an agreement with others who are named in the trust.

Contesting a Trust

While a trust can be a well-structured document, it does not guarantee that the parameters of the trust will be met by the trustee or that the trust will be handled properly. Contesting a trust is often a very emotionally charged process that can divide families. These disputes can cause disagreements, heighten frustration, and provoke heated arguments. However, the process first begins by understanding what parts of a trust are contestable.

There are many reasons that may prompt a beneficiary or other interested party to contest a trust. The first reason, and often the most common, is to contest the validity of the trust itself. This entails making a claim that the trust was created under unlawful circumstances, such as the trustor not being of sound mind and body at the time of signing or that there was coercion, fraud, or undue influence on the trustor in creating the trust.

While most trust documents are typed in order to ensure clarity, trusts that are handwritten are referred to as holographic and are still legal. If the trust is handwritten in the handwriting of the trustor, it is valid. However, trusts that are not handwritten must be signed and witnessed in order to be considered valid.

Other ways that a trust can be contested include:

• Breach of fiduciary duty. This is the good faith and fair dealing responsibility entrusted to the trustee who is named to oversee the trust. They have a duty to put the interests of the trust ahead of their own. If, however, the trustee engages in behaviors that are damaging to the trust, causing a loss of economic value, they may be in breach of their duty. If this occurs, beneficiaries have a right to file a claim against the trustee.
• Failure to provide accounting to beneficiaries. In addition to fiduciary duty, trustees have an obligation to provide regular reports about the trust to the beneficiaries listed. This includes an accounting of all the assets coming and going from the trust. If a trustee fails to provide this information to beneficiaries, they could be removed as trustee through a court process. The only exception to this policy is if all beneficiaries agree to waive their right to receive accounting documentation.

These examples are some ways in which a trust can be contested. Beneficiaries who believe a trust is invalid or that a trustee is not meeting their obligations have a right to file a claim against the offending party. Whenever questions arise about a trust, it is important to speak with an attorney in Newport Beach who can help guide you through your claim to the next appropriate steps.

Is It Difficult to Contest a Trust in California?

If you’re proceeding with contesting the trust, you will file a claim with the probate court that holds the jurisdiction over the trust. Once filed, the probate court will determine if you are eligible to file the claim and if your argument is legally sound. To be eligible to file the claim, you must be listed in the trust, meaning you have a vested interest.

Once the claim has been filed, a notice must be sent to all parties that have a standing with the trust. Each party has an opportunity to respond to the claim and to defend the trust if that is in their interests.

After all parties have been notified and responses collected, the claim will move into the discovery phase. In that phase, all parties will gather evidence that supports their side. This can include dispositions, interrogatories, and requests for other documents.

After the discovery phase, all parties involved will enter into a mediation and settlement phase prior to any courtroom litigation. During this phase, parties are encouraged to work with their legal counsel to reach an amicable solution.

If mediation fails and a settlement is not reached, then the claim may proceed to litigation. A court will then hear the case, at which all parties may present evidence. Ultimately, a judge will decide if the trust contest is valid and a settlement is reached.

There is never a guarantee that your contest against a trust will end in your favor. The circumstances of every case are different, and the outcome of each case will be dependent on the presentation of evidence from all sides. To understand the chances of winning your claim, speak with your attorney, who can help you understand your case.

As long as your claim to contest a trust meets the requirements to do so and is within reasonable parameters, you can easily file your claim with the guidance of your attorney.

What Is a No-Contest Clause?

Many states have clauses that are referred to as “no-contest,” which often means that an established trust cannot be challenged in court. Although California has such a clause, a contest against a trust can still be brought if there is probable cause to do so. In cases where a contest is brought without probable cause, a court may rule that the beneficiary who brought the claim against the trust may forfeit the portion of the trust that is entitled to them.

Additionally, this clause also prevents beneficiaries from claiming that the trustor’s transfer of property was invalid because they did not own it. They also cannot file a claim on behalf of a creditor. Under these circumstances, although you may not file a claim, you may be able to negotiate or mediate with other parties involved to reach an agreement.

Unfortunately, clauses such as these discourage beneficiaries or others with a claim to the trust from filing a claim for fear of losing their assets. However, if the claim is valid, you should have a discussion with an attorney who can help build the confidence to potentially move forward.

Evidence in a Trust Contest

As with any claim, you will need to provide evidence that proves the trust is invalid or has been improperly executed. There are three types of evidence, including witness statements, facts, and other documents. This evidence will be classified as circumstantial or direct. Direct evidence is from a person who can speak to witnessing some form of invalidity. This could mean they witnessed undue pressure or fraudulent activities put upon the trustor prior to signing.

Circumstantial evidence is any evidence provided that cannot be classified as direct. Most evidence used in challenging a trust is circumstantial because witnesses may be difficult to identify. In most trust cases, at the time the trust is drawn up, there may only be two people present: the trustor and the person who is coercing them. Unfortunately, the trustor is often deceased at the time the claim is filed, leaving only one person left to speak directly to what may have occurred.

Invalidating a trust most commonly involves proving that the trust was made under fraudulent circumstances or because of undue pressure. To prove that the trust is invalid, circumstantial evidence such as medical records may be used to show that the trustor was not of sound mind and body to effectively initiate the terms of the trust. Medical records can prove mental incapacitation or other lack of capacity.

Another form of evidence that can be used is financial records. When reviewing financial records, it is key to look for any instances where a trustee receives payments from the trustor or where the trustee takes finances from the estate for their own benefit. Because finances are often the largest asset in a trust, reviewing the records and administration of such assets is crucial to show evidence of the trust’s invalidity.

Finally, look to expert witnesses who can speak to the mental capacity of the trustor. For example, medical professionals could speak to their decision-making abilities, their ease of influence, and more.

When filing your claim, your attorney will help you decide which evidence may be used to help prove the circumstances of your case.

How Long Does a Beneficiary Have to Contest a Trust in California?

In California, there is a statute of limitations over a trust that states any claims contesting the trust must be filed within 120 days from the time you receive the Notice of Trust Administration. If the beneficiary does not receive a copy of the trust and it is requested, there are an additional 60 days in which they have to file a contest against the trust. Ideally, you will want to file your claim as soon as possible.

Once 120 days have passed, you will lose the opportunity to contest the trust.

What Is the Probate Code for a Trust Contest in California?

California Probate Code Section 17200 governs the ability to contest a trust. Under that code, it identifies the specific reasons that a claim may be filed against the trust and who has a right to do so.

Are Trusts More Difficult to Challenge in Court than Wills?

The process for contesting a trust is similar to that of a will; however, because trusts are often created earlier in life, they can be more difficult to challenge. Because trusts are sometimes created many years before the trustor’s death, it’s more likely that the trustee was rightfully named and, therefore, the trust is valid.

Wills, on the other hand, are often created closer to the end of life, and it could be argued they were created under duress or that the testator was not of sound mind. However, your ability to contest a trust depends on your specific circumstances. If the trust in question was created at the end of a trustor’s life, it may be more likely that they were not in sound mind.

Newport Beach Trust Contest Attorney

Trusts can be complicated, whether you’re a beneficiary, trustor, or trustee. However, a trust is designed to fulfill the wishes of a loved one, and honoring those wishes is the purpose of contesting a trust. If you think a trust you are a part of is invalid or is being improperly administered, you may be able to contest it. At Ross Law Group, APC, our team can help.

We recognize that challenging a trust can be complicated and frustrating. Our skilled legal team can review the circumstances of your claim and help you decide on the optimal next steps. Contact us today to discuss your trust contest case.