A trust might be challenged for many of the same reasons as a will, such as a lack of testamentary ability, improper influence, or required formalities. In addition, the beneficiaries may contest the trustee’s activities as contrary to the trust’s provisions and objectives. The majority of settlers will want a no-contest condition in the belief that terminates a beneficiary’s interest if the beneficiary challenges a trustee.
The trust contender must have a financial interest in the trust or be someone who would have inherited under intestacy to have the standing to contest the faith, just like in the law of wills. A trust procedure starts when a contestant files a civil complaint or petition, as opposed to a will contest, which is initiated in conjunction with the administration of the estate.
A contest petition asks that the trust’s contested component be struck. Due to legislatures’ and courts’ propensity to respect the settlor’s intent, contest petitions are often challenging to prevail. The court will do its best to uphold the written directions provided by the settlor and will assume that they accurately reflect their intentions. The court operates under the presumption that trust disputes frequently arise when a friend or relative is dissatisfied after not receiving the total amount of the settlor’s inheritance as planned.
Can a beneficiary challenge a trustee during the procedure of an estate planning lawyer?
As a trustee, you are responsible for managing both assets and beneficiaries. The people may be the more significant issue, even though you may be more concerned about the cash aspect. For example, suppose you establish goodwill with the trust beneficiaries. In that case, for those who get money from the trust—from the beginning, your job as trustee will be considerably more straightforward (and you’ll be far more effective).
Most beneficiaries are apprehensive about losing control and are unfamiliar with the trust administration procedure. The perfect recipe for fear and paranoia is this mix. Even if you follow all technical guidelines, you won’t likely have the beneficiaries’ participation or support if they don’t understand what you’re doing or why you’re doing it. And without it, your work will probably be more complex and take longer than needed.
The most excellent strategy to allay beneficiaries’ worries is to:
- Communicate with beneficiaries as soon as possible, and inform beneficiaries of your responsibilities.
- Assist them in developing reasonable expectations for the time it will take to administer the trust.
- Regard their inquiries as chances to interact with them rather than as intrusive interruptions, and
- Do not withhold from them the trust agreement or the assets.
Calling a family meeting and having everyone assemble to discuss the trust management procedure might be an excellent place to start if all of the beneficiaries are close by. Then, beneficiaries’ fundamental inquiries concerning the trust and its provisions can be addressed. You can also provide them with an overview of the requirements that are met before you can transfer the trust’s assets to them. Finally, focus the meeting’s discussion on what the trust agreement says and how trust administration will be carried out.
More information on the beneficiary
For additional information on whether you should hire an attorney, see Nolo’s article The Trustee’s Job: The Initial Six Months. The attorney assisting you as a trustee can also be present at that first meeting. Concerning the trust and your obligations, the lawyer can provide clarification. Beneficiaries must understand that the attorney is there to represent them as trustees. Of course, beneficiaries can hire their attorneys to represent them if they are unsatisfied with the trust administration process. But if you keep them informed and involved, they shouldn’t need to.
Being both a trustee and a beneficiary that challenges a trustee is extremely frequent. For instance, the surviving spouse nearly always serves as the family trust’s successor trustee and beneficiary. Furthermore, it’s not uncommon for one adult child to serve as the trustee. All siblings receive distributions from their parents’ trusts. As the trustee, it is your responsibility to be fair to everyone. Thus, never advance your interests at the expense of another beneficiary. Therefore this can be a challenging position.
Don’t be careless if you’re in this situation merely because everything has related to the family. Pretend you don’t know the beneficiaries when it comes to keeping records and making decisions. Treat them as you would strangers rather than your siblings or kids.
This necessitates making certain to:
- Maintain meticulous records;
- Never use trust assets for your benefit; and
- If you compensate yourself, prepare to defend the fees you charged and the services you rendered to the trust.