Most people have heard of Last Will challenges. Indeed, while a Will is being probated, interested parties could issue a challenge to the terms of the Will. A Will can be challenged based on a number of different acceptable grounds. These would include undue coercion, fraud, the incapacitation of the grantor, and improper execution.
There are those who are under the impression that you can prevent an estate challenge through the execution of a Trust. Is this true? Are challenges impossible when you arrange for the future transfer of your assets via the terms of a trust?
Let’s examine this question.
The Probate Process
In Cincinnati, when you use a Will to transfer your personally held property, it must be admitted to probate. Probate provides an open forum for those who would want to challenge the Will. One of the responsibilities of the probate court is to determine the validity of Wills.
A trust, such as a Revocable Living Trust, will facilitate the transfer of monetary assets outside of the process of probate. In fact, this is the primary appeal of a Revocable Living Trust. Probate is often avoided because it is time-consuming and potentially costly.
If you use a Trust in Cincinnati, probate won’t be a factor, but that does not mean that someone cannot challenge a Trust. To do so, you would have to initiate a lawsuit, but you could do just that. It is a bit more complicated and perhaps more expensive than challenging a Will, but you can challenge the terms of a Trust.
No Contest Clauses
There are those who contend that you can prevent a challenge to a Trust by the inclusion of a no contest clause. This type of clause would disinherit any beneficiary who challenged the terms of the Trust.
So, if you were named as the beneficiary of a Trust with a no contest clause, you would no longer be a beneficiary if you challenged the Trust. This would mean that you would definitely be disinherited, right?
The answer is no, you would not necessarily be disinherited, because you could win the lawsuit. If you did, the outcome could be more advantageous for you than your position as a beneficiary in the original Trust agreement.
A no contest clause is not going to prevent a challenge to a Trust, but it can certainly act as a huge disincentive, because disgruntled parties may not want to take the risk of complete disinheritance.
Perhaps the best way to prevent a challenge is to carefully weigh the potential reactions of those that will be affected by your estate planning decisions. You may want to send a message, but sometimes the resultant acrimony among family members can create problems that could have been easily avoided.