Some beneficiary clients worry that the funds in a trust are being used improperly. A lawyer can petition the court to surcharge the trustee personally for wrongful conduct that resulted in a reduction of trust assets. If the fiduciary has been misappropriating funds or squadering them, he or she can be replaced by a successor trustee.
Full Answer
Can a beneficiary challenge a trust?
California law allows beneficiaries to challenge trusts. According to the Superior Court of California, three common reasons why trusts are challenged by beneficiaries include: A belief that the person who created the trust was coerced or pressured into creating or signing the trust.
Can a trust attorney defend the trustee against the trust beneficiaries?
Feb 08, 2013 · Beneficiary Challenges. Anyone with an interest in a trust has the right to mount a legal challenge to the trust. Although a beneficiary isn't the legal owner of …
What are the biggest mistakes beneficiaries can make with a trust?
Feb 10, 2014 · Next Post. Typically, a trustee serves its accounting on beneficiaries which discloses all matters involving the trusts. Under normal circumstances, a beneficiary then has four years from receipt of the accounting to bring an action for breach of fiduciary duty. If an accounting is not provided to the beneficiaries, or when the accounting falls short of properly …
What are the grounds for challenging a trust?
Jan 15, 2021 · Trust beneficiaries may bring a claim against a trustee so long as they have a valid reason. Valid reasons for trust beneficiaries suing a trustee include: The trustee misused or misappropriated trust assets for personal gain (e.g., trustee sold trust property and kept the proceeds from the sale).
Can a beneficiary override a trustee?
A beneficiary can override a trustee using only legal means at their disposal and claiming a breach of fiduciary duty on the Trustee's part. If the Trustee stays transparent and lives up to the trust document, there is no reason to “override” the Trustee.
What can invalidate a trust?
If you can prove that the decedent created the trust under coercion, undue influence, or pressure from someone (usually a close family member, caregiver, or supposed beneficiary), a qualified probate court can invalidate the trust.Sep 8, 2021
What is a trust contest?
A trust contest is a type of petition filed in a court proceeding in which a decedent's trust is examined by the court to determine whether it should be invalidated.Sep 22, 2021
Can a trustee lie to a beneficiary?
Yes, a trustee can refuse to pay a beneficiary if the trust allows them to do so. Whether a trustee can refuse to pay a beneficiary depends on how the trust document is written. Trustees are legally obligated to comply with the terms of the trust when distributing assets.
What makes a trust null and void?
Commonly, trust documents contain “null and void” or “savings” clauses (hereafter “null and void”). These null and void clauses operate to cure defects in a trust and preserve the remaining provisions. They prevent the trust from being determined invalid by removing the offending sections from consideration.Apr 3, 2012
What happens when trust is void?
If a trust is void, the property in the trust will normally be held on resulting trust for the settlor or his estate.
Can a beneficiary contest a will?
Theoretically, anyone can challenge a will, whether that's a sibling, or someone who doesn't appear to benefit on first glance, but may be a residuary beneficiary. However, contesting a will is not something you should consider without good reason.Feb 1, 2021
What is a no-contest clause in a trust?
A no-contest clause provides that if an heir challenges the will or trust and loses, then he or she will get nothing. A no-contest clause may be a good idea if you have a beneficiary who may be upset by the property distributed to him or her.Jul 29, 2021
How do you void a trust?
In California, a will can be revoked by a new will that specifically revokes the old one, or by destroying the will by physical act. A physical act can include burning, tearing, canceling, obliterating or destroying the will. This must, however, be done by the person who created the will.
How do I remove myself from a beneficiary of a trust?
It is possible in a trust to give someone a power to remove a beneficiary. This could be done by granting the trustee a power of attorney with a gift rider and an option to exercise a power of appointment to appoint a new beneficiary and remove the old beneficiary.Aug 5, 2020
Who holds the real power in a trust the trustee or the beneficiary?
A trust is a legal arrangement through which one person, called a "settlor" or "grantor," gives assets to another person (or an institution, such as a bank or law firm), called a "trustee." The trustee holds legal title to the assets for another person, called a "beneficiary." The rights of a trust beneficiary depend ...
What rights do beneficiaries have under a discretionary trust?
Beneficiaries don't have any legal entitlement to either income or capital under a Discretionary Trust. The Trustees have 'proprietary interest' or legal ownership. In reality, this means they have complete discretion as to whether or not to make payments of income or capital and to which beneficiaries.
Can a grantor challenge a trust?
The same grounds that are used to contest a last will and testament can be used to challenge a trust. One common ground for challenging a trust is the grantor's capacity to trust . Each state has its own basic requirements for someone to be able to execute a trust. These laws might vary, but generally, a grantor must have reached the majority age in that state, though some states make exceptions if the grantor is married or legally emancipated from his parents. The law also requires that, at the time of executing the trust, the grantor have the mental capacity to understand that he's transferring away his property. If a beneficiary can prove that the grantor didn't understand the transaction he was entering into, this might be sufficient to overturn the trust.
Who is the beneficiary of a trust?
By: Erika Johansen. A beneficiary is someone who will receive a benefit from a trust, but despite the expectation of benefit, the beneficiary still has the right to challenge the validity of a revocable trust.
What is a revocable trust?
A revocable trust is a tool, generally used for estate planning, that allows people to legally transfer their assets to someone during their lifetime, rather than waiting for death. The assets become the legal property of a trustee, who manages and increases the assets. But the trustee can't profit from the trust; all of the profit and benefit of the trust goes to one or more third parties, known as beneficiaries. The creator of the revocable trust, known legally as a "settlor" or "grantor," retains the right to revoke or change the trust at any point during his lifetime, but when the grantor dies, the trust becomes irrevocable, meaning that it can't be changed or ended unless the language of the trust itself says so.
Who manages the assets of a trust?
The assets become the legal property of a trustee, who manages and increases the assets. But the trustee can't profit from the trust; all of the profit and benefit of the trust goes to one or more third parties, known as beneficiaries.
Can a trustee profit from a trust?
But the trustee can't profit from the trust; all of the profit and benefit of the trust goes to one or more third parties, known as beneficiaries. The creator of the revocable trust, known legally as a "settlor" or "grantor," retains the right to revoke or change the trust at any point during his lifetime, but when the grantor dies, ...
Can a trust be changed if the grantor dies?
The creator of the revocable trust, known legally as a "settlor" or "grantor," retains the right to revoke or change the trust at any point during his lifetime, but when the grantor dies, the trust becomes irrevocable, meaning that it can't be changed or ended unless the language of the trust itself says so.
Who is Erika Johansen?
Erika Johansen is a lifelong writer with a Master of Fine Arts from the Iowa Writers' Workshop and editorial experience in scholastic publication. She has written articles for various websites.
What are the biggest mistakes you can make as a beneficiary of a trust?
As a beneficiary of a trust, one of the biggest mistakes you can make is to sit idly by while administration takes place. While, in theory, trust beneficiaries should receive the inheritance they were left without having to do anything, a lot can go wrong between the time the grantor dies and the time trust distributions are made, which is why it’s important for trust beneficiaries to learn their rights and enforce them at every stage of the process. By doing so, trust beneficiaries can rest assured that they will ultimately be provided the inheritance they’re due.
Can a beneficiary sue a trustee?
Can a beneficiary sue a trustee if the trustee has breached their fiduciary duties, committed misconduct or harmed the trust? The short answer is yes. Trust beneficiaries may bring a claim against a trustee so long as they have a valid reason.
What are the rights of a beneficiary in a trust?
Trust beneficiary rights include: The right to a copy of the trust document. The right to be kept reasonably informed about the trust and its administration. The right to an accounting. The right to challenge an accounting. The right to be treated impartially by the trustee.
Who is the trustee of a trust?
The trustee of the trust is the person who has been designated by the grantor to spearhead the trust administration process , which entails everything from taking an inventory of trust property to settling the trust’s debts and making trust distributions to the beneficiaries of the trust.
What is the role of a trustee?
A central aspect of a trustee’s job is providing trust beneficiaries with the information they need about the trust (e.g., the trust’s worth, the assets coming into the trust and leaving it ) to enforce their trust beneficiary rights.
Can you bring a claim against a trust?
If you are a beneficiary of a trust and believe trust property to have been damaged, lost or misappropriated by another trust beneficiary, an heir, the trustee or a third party, you can bring a claim to try to recover the lost property and/or damages.
What is a dispute in a trust?
Disputes can arise when certain payable-on-death or transfer-on-death assets with designated beneficiaries are included in a trust. Disputes can also arise when it comes to light that a designated beneficiary may have engaged in misconduct against the asset owner to have themselves designated.
Legal Challenges Raised in Barefoot vs. Jennings
In a recent case filed in California, one of the children of the deceased whose estate was at issue challenged the validity of several amendments made to her mother’s trust. Her challenges were based on allegations of a lack of mental capacity and undue influence by her siblings.
Does the Disinherited Sibling Have Standing?
Barefoot argued, of course, that she had standing to file the petition challenging the trust amendments because she was the initial trustee and a beneficiary before the amendments that she challenges as being invalid were executed.
Suspicion of Undue Influence or Coercion
Unfortunately, there are situations where it is suspected that undue influence or coercion have been used to coerce someone into either creating the document or including certain provisions. Basically, there is evidence that the testator was likely emotionally vulnerable in some way and someone took advantage of that vulnerability.
Suspicion that Estate Planning Documents Were Procured By Fraud
Deception is a prevalent issue regarding contested wills. A will or trust can be challenged when there is evidence that the person who executed the document may have been tricked into signing the document or defrauded into including terms in the will that were not intended.
Revocable vs Irrevocable Trust – The Main Differences!
The Difference between Irrevocable and Revocable Trust Call us at 949-706-7300California Irrevocable Trusts Revocable vs an Irrevocable Trust A trust is an estate planning tool created to protect a person's assets and ensure a smooth distribution of those...
Spousal Lifetime Access Trust (SLAT) What to Consider!
Request a Case Review Today Call us at 949-706-7300Estate Planning Spousal Lifetime Access Trust Pros and Cons If you love your spouse, you strive for their financial wellness every waking hour. A Spousal Lifetime Access Trust makes things a little easier....
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