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The 6 Main Reasons For Litigating A Trust

Law Blog

Trust litigation can be one of the most contentious legal actions available. Broadly speaking, there are 6 main reasons why trust litigation lawyers advance the clients' cases so let's take a look at each.

Ambiguous Terms

Especially for a beneficiary, ambiguous terms in a trust can be difficult to navigate. If a court concludes that there are terms that aren't clear enough, the first solution is to determine what the intent of the grantor was. When the grantor's wishes can't be determined, the court will focus on how the law generally handles similar cases.

Undue Influence

In granting a trust, a person must express what clearly is their intent. There may be concerns, however, that another party exercised undue influence in the grant of the trust. For example, when a party grants benefits to someone who just came into their life, there may be concerns about why this was suddenly granted.

Fraud

The law requires an administrator to see that a trust is managed competently and with fairness. If a beneficiary suspects, for example, that a trustee has maneuvered a trust's resources for profit, that may represent fraud. A beneficiary might ask the court to remove the trustee and appoint an administrator. Likewise, the beneficiary may have a cause of action to recover damages.

Necessary Capacity

When a grantor puts a trust down in writing, they must be capable of understanding its implications. If a person is mentally incapacitated to an extent that prevents legal consent, a court may nullify the trust.

Notably, such drastic actions only take place when there is evidence that the grantor was mentally incapacitated at the time of signing. If the grantor became incapacitated at a later date, the trust will almost certainly stand.

Improper Documentation, Witnessing, or Signatures

Each state has laws outline what is needed to make a trust valid. Most states require the paperwork to conform to a general structure of what a trust is. They also usually want one or two witnesses to sign in front of a notary that they were present when the grantor confirmed the trust. Likewise, all parties to the granting of the trust must affix all of the necessary signatures to the document.

Later Amendments to the Trust

Sometimes it's not clear what the rules governing a particular trust are. This is often the case if amendments are made at later dates. Unless the amendments are flawed based on one of the previously listed reasons, the most recent ones take precedent.  

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29 November 2020