Families sometimes clash over inheritances in California trust dispute litigation. It's natural for emotions to run high when dealing with the loss of a loved one, and unfortunately, disputes over a trust can arise during this difficult time. While trusts are often seen as a way to avoid family disagreements, they don't always prevent trust dispute litigation.
This often happens because trusts have a lot of flexibility built in, which can result in ambiguity. Trust dispute litigation is more common than many people think. Trust litigation can be just as stressful, expensive, and drawn-out as going to court over a will.
Table Of Contents:
- What is a Trust?
- Common Reasons for California Trust Dispute Litigation
- Who Can Bring a Trust Dispute Case?
- What Happens During California Trust Dispute Litigation?
- FAQs about California Trust Dispute Litigation
- Conclusion
- Get Help From Experienced Attorneys
What is a Trust?
A trust is a legal agreement that allows a person, known as the grantor, to transfer property to a trustee. The trustee is given instructions to hold and manage these assets. A trustee manages assets for the benefit of named people or organizations called beneficiaries.
A key advantage of using a trust as part of an estate plan is that, unlike a will, assets held in a trust can avoid the often lengthy and costly process of probate court after the grantor's death. However, a poorly drafted trust or unforeseen circumstances can lead to conflict, resulting in trust dispute litigation.
Common Reasons for California Trust Dispute Litigation
Trust disputes usually happen when a beneficiary or heir believes something is wrong with a trust. An heir may feel like the trust assets are not being managed in accordance with the grantor's wishes. There are many different reasons this can occur, and California law offers some guidance.
For instance, California law requires the trustee to send all beneficiaries a notice when the trust becomes irrevocable. After this, the beneficiaries only have 120 days to contest the trust. Below is a list of some common reasons why beneficiaries contest trusts.
Undue Influence
Sadly, elder abuse is sometimes at the root of a trust dispute. An heir might believe that the grantor (the person who created the trust) was unduly influenced or even coerced into creating the trust.
Mental Capacity Concerns
Mental capacity, or lack of capacity to create a valid trust, is another common trust litigation issue. If a beneficiary suspects the trust creator wasn't of sound mind when the trust was executed, trust dispute litigation may be unavoidable. The trust document may be challenged if there is reason to believe the grantor lacked capacity.
Breach of Fiduciary Duty
The trustee of a trust has specific duties, and failure to meet those fiduciary duties can give the beneficiaries grounds to file a lawsuit. Some examples of this are a trustee failing to properly invest or manage trust assets or misusing funds. This type of conduct could result in a judge removing the trustee from their position.
Improper Trust Formation
There are rules a trust creator must follow for the document to be valid. For example, in California, a trust must be signed by the trust maker (grantor or settlor) in the presence of a notary public. Trust disputes can happen when beneficiaries challenge whether a trust was formed correctly, particularly after the grantor dies.
Who Can Bring a Trust Dispute Case?
Not just anyone can challenge a trust in a court. An individual generally needs to be a beneficiary of the trust, or a direct heir of the grantor. The rules for who has standing to bring this kind of claim in court can be nuanced, however.
If you believe you may have grounds to challenge a trust, it's essential to speak with an attorney right away. The sooner you take action, the better your chances of success.
What Happens During California Trust Dispute Litigation?
Trust litigation cases can become contentious very quickly. Here are the common legal steps that occur when parties bring these kinds of cases before a judge in California.
Investigation and Research
To best understand the reasons for a trust dispute, all sides will likely need to locate, gather and closely review any evidence they can find to help them accurately assess the case. Relevant evidence includes all estate planning documents, financial records and medical records.
Witness testimony will also need to be gathered, including testimony from anyone who witnessed the signing of the trust. All potential beneficiaries and interested parties should be identified early on. This helps everyone involved figure out if the matter can be settled quickly or if formal legal action is required.
The Pleading Stage
To formally begin a case in California trust dispute litigation, one of the parties must file the appropriate legal documents in Probate Court, generally a Petition. This petition will outline the grounds for the dispute and the relief that the petitioner is seeking. Once the petition is filed, the court will set a hearing date.
Discovery
The discovery phase in trust litigation is where all parties gather more detailed evidence. The procedures available to litigants during this phase include requesting documentation, written responses from opposing parties (interrogatories), and conducting depositions.
California courts commonly require parties to a trust dispute to try and reach an agreement before going to trial. An experienced mediator (often a retired judge) will facilitate these sessions.
Trial
Although most trust dispute litigation settles out of court, it sometimes becomes necessary to go to trial. If this happens, the parties will need to present their case to a judge for a final decision. Trust litigation cases typically take place before a judge in California Probate Court.
However, a jury will hear the dispute under certain specific circumstances. One instance where this may occur is when a trust dispute involves a claim for elder financial abuse.
Possible Outcomes
There are a lot of possible outcomes in a trust dispute, and often the solution involves compromise between the parties involved. The parties can agree to modify or terminate a trust with the Court's approval. Another possible outcome is that a judge may decide to remove or replace the trustee.
FAQs about California Trust Dispute Litigation
How Do I Dispute a Trust in California?
You will need to initiate a formal court case by filing a Petition in Probate Court. California Probate Court is a specialized area of law, so you should seek the guidance of a seasoned probate litigation attorney.
Who Pays Legal Fees in a Trust Dispute in California?
In California, the answer to this question can vary. In certain circumstances, a beneficiary or heir can use the trust's funds to pay for legal expenses associated with a valid trust dispute claim.
How Long Do You Have to Contest a Living Trust in California?
California law dictates a specific process the trustee must follow when a trust becomes irrevocable. If this Notice is sent to you, the deadline to file your case with the court is 120 days, so don't delay reaching out to an attorney experienced in this area of California estate litigation.
What Is the Statute of Limitations on Trust Litigation in California?
This is a complex question. Some claims must be brought within 120 days, while other California trust dispute litigation cases must be filed sooner or later, depending on the specific facts of the case. If you believe you may have a trust dispute, it's best to speak with an experienced estate planning attorney in California as soon as possible to discuss the specific time limits that may apply in your case.
Conclusion
As you can see, trust dispute litigation is a complex process. Litigating these types of cases requires the assistance of an experienced trust litigation attorney. An experienced attorney will be able to guide you through each stage of the litigation process and will work hard to protect your rights.
The best outcome in any legal case is a speedy and fair resolution. For this reason, California law strongly encourages the use of alternative dispute resolution, like mediation, to help families resolve conflict over a trust. Contact us today for more information about California trust disputes.
Get Help From Experienced Attorneys
California trust dispute litigation can be stressful, so remember to be kind to yourself throughout the process. Hire an experienced and knowledgeable California trust litigation lawyer if you are involved in this type of dispute.
If you or your loved one are in need of an attorney experienced in this area of law, give our Irvine trusts and estates law firm a call or fill out our form. We'll walk you through your options and help you determine the next best course of action.
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