Beneficiaries and trustees of a trust have the power to contest a trust’s validity. This can happen when a beneficiary thinks that mismanagement, errors or manipulation have violated the spirit of that trust. If the person creating the trust (i.e., commonly referred to as the “Settlor” or “Grantor” of the trust was ill (and therefore lacked the necessary capacity) at the time of a trust’s creation or modification, they may have made mistakes. If another party influenced, threatened or forced the grantor to make revisions, the trust does not reflect the grantor’s true wishes. If the trust was not executed according to the applicable laws, the trust may be deemed invalid and void.
These situations, among others, may prompt a beneficiary to challenge a trust’s validity. However, beneficiaries should be aware that the presence of a no contest clause may complicate things.
How Does a No Contest Clause Affect Trust Litigation?
Grantors sometimes include No Contest clauses in a trust so that beneficiaries think twice about contesting the document. If a beneficiary contests a trust that has a No Contest clause, they risk partial to full disinheritance. The following is a short list of things you should know about No Contest clauses.
- Challenging a trust with no “probable cause” is one way to lose out on your share of the trust. Probable cause here refers to good reasons and evidence to doubt the validity of the trust. Simply being unhappy with a trust’s allocations doesn’t count as probable cause.
- If you contest a trust with a no contest clause, you may lose. However, it is up to the judge to determine whether you will be either disinherited in part or in full. A judge may decide that a trust is valid, but a reasonable person could have easily thought otherwise. In this case, the judge may not penalize you.
- Contesting a trust amendment does not always activate a no contest clause. These clauses must be specific. If a no contest clause does not specifically say that it applies to trust amendments, then any amendments made may not be covered by the clause. Further, if this amendment does not contain a no contest clause of its own, then the amendment may not be covered. So, in some cases, contesting a trust amendment will not activate a no contest clause. Losing this kind of case may not run the risk of disinheritance.
- On the other hand, defending an invalid amendment may invoke a no contest clause. This can happen if an amendment to a trust negates or contradicts original elements in the trust. If a no contest clause covers these original elements, defending an amendment that changes those elements is the same as contesting those elements. Losing this kind of case may mean losing out on your share of the trust.
Contact Our Pasadena Trust Litigation Lawyer for More
If you are a beneficiary of a trust you believe to be invalid, you have options. But there are risks that you should be aware of before challenging the validity a trust. Determining whether to contest a trust or not should depend on the strength of your case.
Trust litigation can be tricky. You should always seek legal counsel to best determine your options. The last thing you want to do is lose out on your inheritance completely. Our Pasadena trust litigation lawyer may be able to help. Contact us today at (626) 345-7210 or via our online portal.