In America, anyone can sue for just about anything. But the question is always whether they can win the lawsuit.
Challenging a last will and testament or a revocable trust is no different. Disgruntled family members such as children or a spouse from a previous marriage, or an any individual who might be expecting to inherit a larger share of your estate than you allot them, might find it worthwhile to contest your estate plan.
But why should anyone claim part of your legacy when it goes against your last wishes?
When considering this question, it is important to know that revocable trusts are much more difficult to successfully contest than wills.
In most states, about 30 percent of all contested wills end in a some kind of favorable outcome for the estate challenger. But very few revocable trusts, also known as living trusts, are successfully contested.
Part of the reason is a will is created under testamentary laws, while a trust is created under laws of contract.
A revocable trust is a legal document that puts assets of your choosing into a “trust” during your lifetime. A trust exists when you give property to another person, called a trustee, to hold or manage for your heirs or beneficiaries. Income is earned on the assets and trust provisions can be easily amended or revoked at any time.
A will on the other hand, is created at a single moment in time and only goes into effect upon your passing. This can leave room for challenges based on whether the will sat idle for long periods of time, perhaps decades, or if you were fully competent at the time the will was created, or whether you were unduly influenced by another person, especially later in life.
A revocable trust is used on an ongoing basis after it is created. Courts have consistently ruled that the ongoing nature of managing trust assets amounts to a presumption that the person establishing it is both aware and not improperly influenced against their will, as a history of trust-related decisions would clearly show.
A revocable trust’s contestability protection is valuable in more ways than one. Not only does it save on litigation costs typically paid from estate assets, but it avoids delays and emotional stress when families are grieving. Does this article raise more questions than it answers for you? Do not wait to schedule a meeting to let us help you get the answers you need.