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Biddle Law Estate Planning Blog

Monday, September 25, 2017

Tips for Avoiding Trust Litigation

What are the most common reasons for trust litigation?

When you create a trust, you expect that your assets will be distributed in accordance with the carefully set out terms of the trust.  While most trusts are upheld after the death of the settlor, many others become embroiled in litigation.  Disagreements over the validity of a trust or certain terms within it can be heartbreaking and expensive.  The good news is that there are steps you can take to help to ensure your trust does not become the subject of litigation.  Understanding what leads to trust litigation can help you to make a trust that will not be questioned after your death.  

The Causes of Trust Litigation

The most common scenario that gives rise to trust litigation is when there is a question as to whether the trust creator or settlor lacked legal capacity at the time of making or amending the trust.  If capacity is at issue, the court will need to carefully examine the mental state of the settlor during the relevant time period.  Other common causes of trust litigation include concerns over undue influence.  If fears exist as to whether the settlor was coerced into inserting certain provisions within the trust, litigation may be necessary.  

Avoiding Trust Litigation Through Planning

Those in the process of making a trust, or trustees who have been charged with managing trust assets, should anticipate the potential avenues for trust litigation so as to avoid them.  Start by making sure the trust documents are not ambiguous.  Any trust amendments should be carefully crafted to make it clear what provisions are being altered.

Anticipate likely sources for concern with the trust or its administration.  If the settlor is elderly or ill, be prepared for a capacity challenge.  Have a physician attest to the settlor’s capacity, if possible.  Assess whether a certain beneficiary, or would have been beneficiary, may protest terms within the trust.  Communicate with this individual in advance so that the terms of the trust are not a surprise.  Where trust litigation cannot be avoided, consult with a trust administration and litigation attorney as soon as possible to protect your legal rights.


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