How and When to Contest A Trust

The natural heirs or beneficiaries of someone whose estate plan is based around a trust sometimes disagree with the stipulations and limitations placed on them by the trustee. You may think it would just be easier to contest the trust and deal directly with the estate’s funds. However, challenging a trust isn’t easy. Knowing how and when to contest a trust can save you and your loved ones time, energy, and frustration.

How to Contest a Trust

Florida law gives trustees considerable power over how trusts are operated and distributed. However, trustees still have responsibilities to the trust beneficiaries. The law requires them to uphold specific duties, including acting as a fiduciary for the beneficiaries’ financial interests. When they fall short on those duties, the beneficiaries may want to contest the trust. Trust contests can also result when beneficiaries believe they have been disadvantaged or disinherited.

A trust contest is a lawsuit filed in the Florida civil court against the trustee, or the trust itself. It can be brought by any beneficiaries or by heirs-at-law who find themselves disinherited or receiving less than they would have under Florida probate law.

When to File a Trust Contest Lawsuit

Trust contest lawsuits generally must be filed within 6 months of the beneficiary receiving proper notice of the trust instruments. If you are alleging that the trustee violated some duty, there are additional time periods that apply.

Reasons to Contest a Trust

Some of the reasons to contest a trust are very similar to the reasons an heir may seek to invalidate a Will:

• Undue Influence: The trustee or a significant beneficiary put improper pressure on the person creating the trust to gain a financial advantage.
• Lack of Capacity: The person creating the trust was not of sound mind at the time.
• Mistake in Execution: The trust agreements failed to comply with state laws in how they were created and executed.
• Fraud: The trust was created for some illegal or self-dealing purpose.

In other cases, beneficiaries aren’t trying to invalidate the trust, they just need the Court’s help in interpreting the trust agreement’s language. If a trust is not carefully drafted, it can result in ambiguity as to who is entitled to distributions, on what conditions, or what a trustee is to do when disputes arise. You can file a trust contest lawsuit to get clarification of this language. However, this will result in the trust being reformed based around the court’s decision.

Finally, many trust contests are based on a trustee’s actions after the trust goes into effect. Often, the end result of this type of trust contest is the appointment of a new trustee, along with closer monitoring by the courts.

Chances of Successfully Contesting a Trust

A well-drafted trust doesn’t leave much room for challenges. Florida courts are unlikely to go against a deceased person’s wishes and dissolve a trust that was properly formed. If you are a natural heir seeking to get your intestate share, it will be up to you to prove that the trust was invalid or illegal, and that’s not easy. Similarly, trustees are given broad discretion to manage trust assets and distribute trust funds, as long as they act according to the terms of the trust agreement. If you are trying to remove a trustee, you will need to show that they acted in a way that breached their fiduciary duties.

Other forms of trust contests – especially those seeking clarification – are easier to pursue. However, there is always the chance that the judge will read the trust agreement differently than you do. That is why it is often best to consider all your options before filing a lawsuit to contest a trust.

Alternatives to Heirs and Beneficiaries Seeking Termination of a Trust

Contesting a trust may sometimes be difficult, but the good news is that often the trustee and the other beneficiaries aren’t your enemies. In many cases, they are family, friends, or business partners. These people have good reason to resolve any trust disputes that arise without defending a trust contest lawsuit. There are many options available that don’t involve going to court to terminate a trust. You and your trust administration attorney can:

• Request an accounting from the trustee to clear up any financial questions
• Negotiate a settlement agreement with the other beneficiaries through mediation
• Modify the trust agreement or reform the trust to clarify confusing language or better reflect the intent of the person who made it
• Terminate a trust with insufficient assets to justify the cost of administration (generally under $50,000) and distribute the property according to its purposes
• Negotiate a trustee’s resignation with at least 30 days notice to all beneficiaries

These options are generally faster, easier, and less expensive than filing a trust contest lawsuit. They also protect family relationships and avoid hard feelings between siblings, cousins, and friends.

Get Guidance in Deciding Whether Contesting a Trust is the Right Choice

At Harrison Estate Law, P.A., our experienced estate and probate team understand the realities around challenging a trust. We can help you evaluate whether you have a basis to file a trust contest lawsuit, and consider out-of-court options that may accomplish your goals. We will help you be sure your family members’ trust is handled properly so it can provide for your family’s needs for years to come. Contact us here or call 352-559-9828 to get help today.