A How to Guide to Trust Contests in Los Angeles, San Jose, San Diego, Orange County, San Francisco, Sacramento, Riverside, and Surrounding Areas of California
The validity of a trust may be contested on similar grounds as a will.
On What Grounds Can I Contest a Trust?
A trust contest may be based on: undue influence; testator lack of capacity to execute a trust; trustor coerced in creating a trust; fraud; mistake; duress; and trust formalities not being followed among others.
Undue Influence Trust Contest
Undue influence exists when a person uses “excessive persuasion that causes another person to act or refrain from acting by overcoming that person’s free will and results in inequity.” Probate Code § 86; Welf & I C §15610.70(a).
Some factors considered in determining whether or not undue influence was present include the vulnerability of the victim, the influencer’s apparent authority, and how fair the result is. Welf & I C §15610.70(a)(1)–(4).
Lack of Capacity Trust Contest
When lack of capacity is used to invalidate a trust, it sets forth that a trustor (the person who created the trust) lacked the mental capacity to execute the trust at the time the trust was executed.
Generally, the test for testamentary capacity to create a valid trust is similar to that required to make a valid will. The testator must be at least 18 years old and have the ability to know the extent of their property and those that are the natural objects of their bounty (i.e., family members such as spouses and siblings etc.). Probate Code §6100.5(a).
Elder Abuse Trust Contest
In the context of trust and will contests, elder abuse exists when when financial, psychological or physical abuse is imposed on a vulnerable elderly person and plays a role in the signing of a trust.
Fraud Trust Contest
Fraud occurs when the creator of a trust is deceived into changing or executing the document. Probate Code §6104. Importantly, When only part of a will or trust is procured by fraud, the rest of the instrument can be held valid. Estate of Carson (1920) 184 C 437.
When fraud is the sole ground of a contest, the theory holds that the testator was deceived into doing what they would not have done in the absence of fraud. Estate of Newhall (1923) 190 C 709, 7.
Forgery Trust Contest
Forgeries occur when a document is signed fraudulently by someone other than the person whose signature appears on the document.
Mistake Trust Contest
When mistake is the basis of a contest, what would be sufficient to set aside a trust often will not be enough to set aside a will. A trust may be rescinded when there was a substantial mistake of law or fact in its execution. Walton v Bank of Cal. (1963) 218 CA2d 527. In contrast, a will cannot be rescinded on the basis of mistake when the will as a whole was executed with testamentary intent. Estate of Smith (1998) 61 CA4th 259, 270. To rescind a will, mistake must go to the execution or to the formation of testamentary intent in its entirety.
Duress and/or Menace Trust Contest
A trust contest may be based on duress. Under Cal. Civ. Code §1569, duress consists of the following:
- Unlawful confinement of a party, the party’s spouse, or an ancestor, descendant, or adopted child of the party or the party’s spouse;
- Unlawful detention of the property of any such person; or
- Confinement of any such person, lawful in form, but fraudulently obtained, or fraudulently made unjustly harassing or oppressive.
Menace consists of a threat of duress or of unlawful and violent injury to person, property, or character. Cal. Civ. Code §1570.
Duress or menace must be pleaded with specificity. See Estate of Streeton (1920) 183 C 284.
Burden of Proof on a Trust Contest
A testator is presumed sane and competent, thus the contestant has the burden of proving by a preponderance of the evidence that a testator lacked testamentary capacity at the time a trust was executed. American Trust Co. v Dixon (1938) 26 CA2d 426, 431.
For mistake, lack of capacity, undue influence, fraud, and duress, the contestant bears the burden of proof. Cal. Probate Code §8252(a).
Limitations on Transfers to Drafters and Others in a Trust Contest
No Contest Clause in a Trust Contest
A no-contest clause is a provision in an instrument that, when enforced, would penalize a beneficiary if they chose to file a contest. Probate Code §21310(c)
Typically a no-contest clause provides a beneficiary will forfeit their interest in an estate plan if they contest a trust. A beneficiary must choose between accepting the gift provided in the trust instrument and pursuing a trust contest.
Thus, if there is a no-contest clause in a trust and you would like to challenge the trust, you should first ensure that you have probable cause to contest the trust as you could potentially lose your right to receive benefits from the trust due to the no-contest clause. Probate Code §21311(a) Probate Code §21310(c)
Probable cause exists if the facts known to the contestant would cause a reasonable person to believe there is a reasonable likelihood that the requested relief will be granted after an opportunity for further investigation or discovery. Probate Code §21311(b).
No Contest Burden of Proof re: Trust Contests
The party seeking enforcement of a a no-contest clause against a direct contest under Probate Code §21311(a) has the burden of proving that the contesting party lacked probable cause. Key v Tyler (2019) 34 CA5th 505, 528.
What is the Timeline for Contesting a Trust?
A person who receives notice of a trust from a trustee must begin a trust contest within 120 days of the date the notification by the trustee is served on them. California Probate Code Section 1606.7. Alternatively, pursuant to Prob. Code § 1215, a person may request a copy of the terms of the trust within the 120 day window above and upon delivery of such copy has 60 days to begin a trust contest. Probate Code, § 16061.8.
Contact a California Trust Contest Attorney Today!
California laws governing trusts are complicated. If you have an interest in a trust, as a beneficiary or a trustee, contact one of the trust, probate and estate attorneys today for a free consultation at (844) 4-TALKOV (825568) or contact us online.
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