When you are planning your estate you should consider the possibility of challenges. This is particularly true if you have reason to believe that some people may not be happy with the way that your resources are going to be distributed.

Most people have heard of will challenges. It is possible to challenge a last will, and it is relatively simple to do because the will must be admitted to probate. The probate court is charged with the responsibility of determining whether or not the will is valid. As a result, there is a ready-made forum in place within which will challenges can be presented.

Because of the fact that a trust does not have to be admitted to probate, you may get the idea that you can prevent estate challenges by conveying assets into a trust such as a revocable living trust. Since the trust does not have to go through probate it can’t be challenged, right?

This may be a logical line of thinking, but it is inaccurate.

Challenging a Trust

Clearly, it is simpler to challenge a last will because of the existence of the probate process. However, if you wanted to challenge a trust you would have recourse. To challenge a trust you would have to initiate a lawsuit.

There may be expenses involved that you would not face if you were challenging a will, and the whole process will be a bit more complicated. However, it is indeed possible to challenge a trust.

There are those who will say that you can draw up your trust in a way that prevents challenges. The contention is that you can eliminate the possibility of a challenge to the trust by including a no-contest clause.

Let’s explain by way of a hypothetical example. Let’s say that you are one of the beneficiaries of a trust, and it contains a no-contest clause. The clause stipulates the disinheritance of anyone named as a beneficiary who challenges the terms of the trust. If you challenge the trust, you are no longer going to be a beneficiary.

This does not prevent you from filing a lawsuit challenging the terms of the trust. Yes, you will no longer be a beneficiary if you challenge the trust. However, the court may find in your favor after you file the lawsuit and invalidate the terms of the trust. In the end, you may get more than you would have received if you did not challenge the trust.

We are not necessarily advocating trust challenges. Our only intention is to clear up a misconception. It is indeed possible to challenge the terms of a trust, but a no contest clause could serve as a strong disincentive.

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Ryan M. Denman and Dennis D. Duffy

Duffy Law Office, PLLC