The Statute of Limitations for Contesting Trusts

By Beverly Bird

Living trusts can go a long way toward eliminating the hassles involved with settling your estate. If you create one, the assets you place within it escape probate and pass directly to your beneficiaries. Just as with wills, however, a trust is vulnerable to being contested by unhappy beneficiaries. A trust is more difficult to challenge than a will, but beneficiaries do have a limited period of time within which to act.

Notice to Beneficiaries

Although the exact rules depend on individual state laws, it's generally required that your trustee must issue written notice to your beneficiaries when he's about to settle the trust. Statutes of limitations for contesting your trust typically begin with receipt of this notice. For example, in California, your trustee has 60 days within which to send the notice, and the clock for contesting the trust begins ticking with this event. In Colorado, the starting point is either the date your beneficiaries receive notice, or, if the trustee does not send notice, your date of death.

Statutes of Limitation

The amount of time your beneficiaries have to contest your trust is typically pretty short. In Colorado, they have three years if your date of death is used as the starting point, but this presumes that your trustee neglected to send them notice in the months after your death. If he had done so, your beneficiaries would be limited to 120 days after receiving it. They have either three years from your date of death or four months after receiving notice, whichever occurs first. The statute of limitations can extend up to four years in California if your trustee fails to issue notice to beneficiaries, but otherwise, they have only 120 days in this state as well.

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Grounds for Breaking a Living Trust
 

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