Inheritance-related disputes can have a lasting impact on everyone involved. This explains why most people create estate plans to make clear their wishes when they are no longer around to speak for themselves.
Unfortunately, inheritance disputes are not uncommon. Here are some of the reasons why a seemingly clean trust can trigger costly inheritance disputes:
When a beneficiary is disinherited
Disinheritance can shock and, at times, anger the affected party, especially if they learn about it after the settlor’s demise. They might wonder if the settlor was unduly influenced or coerced into disinheriting them or if the trust has been forged. If a disinherited party has questions regarding the circumstances that led to their disinheritance, they may dispute the trust in court.
Issues regarding the settlor’s capacity
One of the leading causes of trust disputes is questions regarding the settlor’s mental capacity at the time of creating the document. This is known as the testamentary capacity. Under California law, the settlor is required to understand the implications of creating a trust, the property they are putting in the trust and their relationship with the beneficiaries they have mentioned in the trust.
If the settlor lacked the testamentary capacity to create a trust, then an interested party might dispute the resulting document.
Misunderstandings
Sometimes, a trust might be duly created and signed. However, disputes might still arise, especially when the beneficiaries have problems with the trustee. For instance, if the beneficiaries believe the trustee is mismanaging the assets or is not communicating as they should, they might head to court.
Trust disputes can cost the affected parties a lot of money. They can also sow lasting seeds of discord. Find out how experienced legal counsel can help you minimize the chances of someone disputing your trust.