Trusts are a great tool for estate planning purposes in Pennsylvania. You can continue to control what happens to certain assets through a trust established for loved ones or others, even a nonprofit organization whose mission aligns with your values and beliefs. Trusts are meant to be carried out in accordance with the terms and conditions. Sometimes, though, challenges arise. You may not think that is possible, but it is. There are certain situations that could raise questions due to allegations of undue influence or mental competency.
At Creenan & Baczkowski, PC, our trust attorney based in the Pittsburgh metro area guides, advises, creates, and executes trusts that are comprehensive and in accordance with the law and your wishes. We also can review a trust instrument you believe may be flawed and help you determine if you have the grounds to bring a trust contest. Contact us at 724-733-8832 to schedule a consultation to make sure your trust is solid or to contest one that may not be.
Can a Trust be Challenged in Pennsylvania?
Trusts can be challenged, much in the same way that wills can be challenged. The person(s) challenging the trust should have an interest in the trust or would have had an interest under the rules of intestacy.
Typically, trusts may be challenged in whole or in part. In other words, if someone who has an interest in the property only disagrees with a portion of the trust, they may challenge that part alone. If they disagree with the trust in its entirety, they may challenge it in full. The ability to challenge the trust varies by jurisdiction. The same is true for amendments to a trust. It's also important to remember that courts like to honor the intent of the trustor.
In order to discourage their friends and family from contesting the terms of their trust after they pass away, some trustors include no-contest clauses in their trusts. A no-contest clause generally states that any person who contests the trust and is unsuccessful in that contest, will not receive anything from the trust or in the way of inheritance. No-contest clauses are only enforceable in some states.
How Are Trusts Contested in Pennsylvania?
Depending on the jurisdiction, there may be a statute of limitations on the amount of time allowed to contest a trust. It is important to verify whether a time restriction exists, and, if so, exactly what that time restriction is.
There are also restrictions on who is allowed to contest a trust. In order to contest a trust, an individual must have a stake in how the property is dispersed. Proper parties include:
- Beneficiaries of the trust
- Persons who would inherit under the rules of intestacy
- Trustee after the trustor passes away
When contesting a trust, most people obtain the assistance of an estate planning lawyer in their state. This attorney will know the laws and rules on how to properly contest the trust. At Creenan & Baczkowski, PC, our estate planning attorney in Pennsylvania handles all types of trusts and can assist when a trust is contested.
Common Grounds for Trust Contests in Pennsylvania
You must have grounds to contest a trust in Pennsylvania. Different grounds to challenge a trust exist, and they vary by jurisdiction and the particulars of each trust. However, there are some grounds that are more common than others, including undue influence, lack of mental capacity, and fraud.
Undue influence occurs when a person creates a situation in which a trustor's ability to act of their own free will is impacted. The person using undue influence may use actual force, coercion, or duress to have the trustor act in a way that is favorable to them. Courts will look at the circumstances to see if there was a relationship between the parties and if the person accused of undue influence abused that relationship.
An example of this could include a father who remarries. At one point he may have told his children from a previous marriage that he was leaving all his assets to them, but then – without telling the children – he creates a trust for the new spouse. Upon his death, the children find out about the trust. They could challenge the trust, arguing that the spouse unduly influenced his decision.
A person must be of sound mind and have the cognitive ability to create a legally enforceable trust. When there is evidence that they did not have the mental capacity to create the trust, the trust may be challenged and subsequently invalidated.
An example of this could include a decedent who, prior to their death, executed an amendment to the trust. The amendment significantly alters the contents, terms, and conditions of the trust. At the time the decedent executed the amendment, however, they were suffering from dementia. This amendment could be successfully challenged based on a lack of mental capacity.
When there is proof that a trustor was “tricked” into signing the trust document, it is unlikely that the trust will survive a challenge.
An example of this would be if a close relative told the trustor they were signing a document needed for the sale of a vehicle, and they were actually signing the document establishing the trust.
There are other grounds that could be viable reasons to contest a trust.
- Forgery occurs when a trust or an amendment to it is fraudulently signed by someone other than the decedent.
- Elder abuse occurs when a trustor is an elderly person, and that person was the subject of financial, physical, or psychological abuse that played a role in the trustor executing a trust or an amendment.
- Revocation occurs when the decedent revokes a trust by executing a new trust that modifies or destroys the old one.
- Mistake occurs when the decedent executed a trust by mistake or was mistaken about the laws – this is why it is very important to have an estate planning attorney in the Pittsburgh metro area who is knowledgeable about trusts to help you create and execute a proper trust.
There may be more than one ground to contest a trust, too. Making sure you provide all grounds to contest a trust will increase your chances of success.
Three Ways to Protect a Trust from Challenges in the Pittsburgh metro area
There are steps that a trustor can take to reduce the risk of their trust being challenged, or if it is challenged, from being modified or eliminated. Some of the best ways to be proactive in protecting a trust include establishing capacity, demonstrating legal compliance, and procuring a second opinion.
One of the most common challenges to trusts is that the trustor lacked the capacity to understand what they were doing when the trust was created. To prevent this from happening, it is a good idea for a trustor to take steps to prove their competency. This may involve having a complete medical exam, both physical and mental.
Ensuring Trust Is Legally Compliant
It is imperative that a trust complies with all governing laws and regulations. If it does not, the floodgates for someone to challenge the trust are opened. The best way to ensure compliance is to obtain representation from a lawyer with experience in estate planning.
Obtaining a Second Opinion
While one licensed attorney is all that is needed to execute a compliant trust, having a second licensed attorney review the trust may be a good idea. This is not because there is a lack of confidence in the first attorney, but because a court is much less likely to find a flaw in a trust that two independent estate planning attorneys have stated is valid.
What Happens to Trust Assets in Pennsylvania after a Successful Challenge to a Trust's Validity?
Typically, two possible outcomes could result from a successful challenge to a trust:
- Trust assets will be distributed according to the terms and conditions or provisions set forth by a previous estate plan; or
- Trust assets will become part of the intestate estate if a previous estate plan does not exist.
Whoever are the beneficiaries or heirs of the estate plan or intestate estate will benefit from the successful trust contest.
Contact an Estate Planning Attorney in the Pittsburgh metro area Today
Trusts are designed to help beneficiaries and are meant to carry out the will of the trustor. Sometimes, however, a trust may not serve its purpose, and grounds to contest the trust may exist. At Creenan & Baczkowski, PC, our trust lawyer in the Pittsburgh metro area helps people challenge invalid trusts. Contact us today by filling out the online form or calling us at 724-733-8832 to schedule a consultation.