While establishing a trust for your loved ones is often a wise choice, a number of pitfalls can make the experience more stressful than it has to be. Financial matters—and, in the case of a trust that goes into effect after the death of the grantor, grief—can make an already delicate situation even more challenging. While nobody wants to plan for the worst-case scenario, doing so can ensure your wishes are carried out, and your trust remains unchallenged. In addition to being very clear about your trust terms and working with an estate planning attorney to ensure procedural compliance, trusts can also incorporate a no-contest clause that removes a challenging beneficiary’s right to the trust if they challenge the trust and fail.
Reasons to Challenge a Trust
A trust can generally be contested in the same way that a will can. These include a wide range of reasons that can vary based on your own personal circumstances. For example, someone challenging a trust may claim that the person who formed the trust lacked the capacity to do so or did so under duress or undue influence. There are also certain procedural requirements a person must meet when establishing a trust, and a challenger can attack on those grounds if any steps are missed, or any T’s are uncrossed or I’s undotted. Specific terms of the trust can also be challenged if ambiguous or unclear or somehow against reasonable public policy. Alternatively, beneficiaries can sue the trustee directly if the trustee acts outside of the bounds or spirit of the trust.
Proving Standing in Texas
Proving standing in trust and will challenges varies based on different states’ interpretations of the law. In contrast to challenging a will, which is done when the estate is administered, challenging a trust commences with the filing of a civil complaint. In Texas, trust disputes are still typically done in probate court. Generally, a person needs a financial interest in the trust to gain standing to challenge that trust. In Texas, this includes both primary beneficiaries and contingent beneficiaries. Primary beneficiaries receive the benefits of a trust before others can receive them. Contingent beneficiaries cannot receive funds until the death of another person, but still have many of the same rights as primary beneficiaries. Representatives of beneficiaries, such as parents of minors or those who are agents in a power-of-attorney agreement, can also bring claims. Some states allow people who have been written out of a trust to challenge it, but the requirements vary state by state.
Speak with an Experienced Houston Estate Planning Attorney About Your Trust Questions
Avoid trust disputes and costly litigation—and headaches for your family and loved ones—by making your estate plans crystal clear. The Houston attorneys at McCulloch Miller, PLLC are skilled in a wide range of estate planning and can help you craft a trust or will that is ironclad that includes trustees that are worthy of the responsibility. Call a member of our team today at (713) 903-7879.