It is important to think long and hard about the inheritance planning decisions you may want to make that can cause someone in the family to get very upset. Estate contests can and do arise, and these situations can get very messy.
Some people are under the impression that you can challenge a Last Will, but you can’t challenge a Trust. They assume that the use of a Trust would provide an ironclad solution. Generally speaking, a Trust is a better choice, but let’s take a closer look at this assumption.
If you use a Last Will to state your final wishes regarding the transfer of your assets, there would be no distributions until the estate has been probated. Probate is a legal process, and it is presided over by a court.
During probate, interested parties could challenge the will. The process is set up to allow for this. There are certain accepted criteria for will challenges. These would include improper execution, undue coercion, fraud, forgery, and a lack of mental capacity.
Probate provides a ready forum for will challenges, though they are rarely successful. However, even if the contest is not successful, it would elongate an already lengthy process.
There are those who will say that you prevent estate challenges when you create a trust. In fact, this is really not the case.
It would be possible to bring a legal action contending that the trust was created under undue coercion, fraudulent circumstances, or when the grantor was incapacitated. The actions of the trustee could be brought into question as well.
At the same time, it is much more difficult to challenge the terms of a trust, because there is no open legal proceeding taking place as a matter of course. Assets are transferred to the beneficiaries of the trust outside of the process of probate.
To challenge the trust, a disgruntled party would have to bring a lawsuit, and this can be expensive and somewhat complicated.
You may hear about no-contest clauses. Some folks have the idea that a trust is ironclad because you can include a no-contest clause. This type of clause would state that anyone who files a suit to challenge the trust would no longer be a beneficiary.
If an unhappy person was named as a beneficiary and they were going to receive something, they may not want to risk it by filing a suit even if they thought that something was amiss.
However, this does not mean that they can’t go ahead and file the suit and take their chances. If the court was to rule in their favor, the decision of the court would hold sway, and the no-contest clause wouldn’t accomplish anything.
This being stated, it would serve as a very powerful disincentive, so the clause would have value.
Be Forthcoming With Your Attorney
When you are discussing your estate planning objectives with your attorney, you should be very forthcoming. You don’t want to conceal anything that may be relevant.
If you know that someone may be unhappy with your decisions, let your estate planning attorney know. He or she can suggest measures that can mitigate the likelihood of a successful challenge.
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