Can a Living Trust Be Disputed?

By Maggie Lourdes

A living trust is an estate planning tool that allows a person's property to bypass probate court proceedings after death. At the same time, living trusts generally allow people to maintain full control over their assets during their lifetimes. Trusts are governed by state law and, like all legal documents, must comply with applicable statutes. A trust that does not conform with the law may be challenged in court and partially or completely invalidated.

A living trust is an estate planning tool that allows a person's property to bypass probate court proceedings after death. At the same time, living trusts generally allow people to maintain full control over their assets during their lifetimes. Trusts are governed by state law and, like all legal documents, must comply with applicable statutes. A trust that does not conform with the law may be challenged in court and partially or completely invalidated.

Standing to Dispute

Not just anyone can dispute a living trust. A person must prove she has legal standing to challenge a trust. This means a party must show she would be harmed if the trust terms were enforced. For example, John Smith's trust leaves his assets "to all my children, Betty and Mary." John has another child, Sally, who the trustee tries to eliminate because she is not mentioned by name. Sally has standing to argue her father accidentally left out her name since the trust states all of his children are to receive his property.

Protect your loved ones by a legally binding will. Make a Will Online Now

Technical Disputes

Each state has its own laws governing the technical legal requirements for making a trust. Generally, a person making a living trust must be at least 18 years of age. Trusts must be made to accomplish a legal purpose. For example, a trust cannot be made for the specific intention of laundering money. Trusts that hold real estate must be in writing and signed by the trust's maker. A person may dispute the legal enforceability of a trust if he can prove it fails to meet a technical, legal requirement.

Fraud

A trust may meet all technical requirements, but it still may fail if fraud exists. For example, Bob is tricked into signing a trust for his house after being told it is a contract for lawn services. The legality of the trust can be disputed because Bob was fraudulently induced to sign. Even if Bob is a competent adult, and the trust is signed and in writing, a court could invalidate it based on fraud.

Pressure and Conflicts

A party must sign a trust under his own free will. If a person signs under duress, while being physically threatened, for example, the enforceability of the trust can be disputed. Undue influence is a similar ground for disputing a trust. Undue influence occurs when someone, such as an elderly person, is pressured or rushed into signing a legal document. A trust may also be challenged if a person closely involved with the drafting, witnessing or encouragement for a trust stands to gain by its terms. Such conflicts of interests may undermine the trust's validity.

Protect your loved ones by a legally binding will. Make a Will Online Now
What Happens to a Trust When No One Is Named As a Beneficiary?

References

Related articles

Verifying Authenticity of a Last Will & Testament

The maker of a will, commonly known as the "testator," must draft the will in accordance with the state's probate code for it to be held as valid. Generally, these formalities exist so that a probate court can verify the authenticity of the will. When a will is admitted to probate court, the court examines the will to make sure it was made in compliance with state law.

What Is the Meaning of Lifetime Estate on a Deed?

A life estate is an ownership interest in real estate, governed by state law. It gives a person, called a life tenant, the right to live at or use property during his lifetime -- but he has no right to sell the property. When life tenants die, their life estates end, and the property reverts to a designated person called a "remainderman," who then owns the property. Life estates can bypass probate if they are granted through deeds or trusts.

What Can Invalidate a Living Trust?

With a living trust, an individual - known as the "settlor" - typically gives up control of property placed in the trust. Although trust law is largely state-specific, parties with an interest in a trust or its property may ask a court to invalidate all or part of the trust on the grounds there was some impropriety in its creation.

LegalZoom. Legal help is here. Start Here. Wills. Trusts. Attorney help.

Related articles

Protesting a Trust

A trust is a legal instrument that allows a trust owner to maintain full control of his assets both before and after ...

The Law Against Someone Tampering With a Paternity Test

While there is little doubt to the maternal lineage of a child, the child's paternity isn't always readily apparent. If ...

Does a Trust Beneficiary Have Standing in a Suit to Determine a Trust Property?

All trusts have trustees and beneficiaries. A trustee's job is to manage, hold and distribute trust assets in favor of ...

Can a Last Will Be Revoked After a Person Dies?

Individual state statutes set the rules for making, revoking, and probating last wills and testaments. An individual ...

Browse by category