Estate planning is critical to proper wealth management. A comprehensive estate plan can ensure that your legacy passes on to the right people. It can also help preserve the value of your assets and speed up the distribution process.
In this regard, trust funds are one of the best legal means to distribute assets amongst beneficiaries. Here, a designated trustee transfers your property to an intended heir after a certain period. A trust is often seen as a better alternative to a will, thanks to its effectiveness.
However, trust disputes may arise when a trust arrangement contains complex conditions, or when a negligent trustee abuses their power. In this post, we’ll explore various types of trust disputes in detail. But first, let’s learn more about trusts.
What is a Trust?
A trust is a method of estate transfer where a grantor appoints a trustee to hold or direct property on behalf of a specified list of beneficiaries. While it is possible to create a trust by verbal agreement, you’ll also need a written trust deed that:
- Proves the existence of the trust
- Lays out the terms and instructions for the trustees
- Outlines the rights of the beneficiaries
Setting up trust comes with several advantages. A trust can help you:
- Avoid probate – an expensive and lengthy process that can delay the transfer of your assets
- Control your finances posthumously
- Minimize the possibility of a court challenge, as a trust is harder to undermine than a will
- Prevent a conservatorship
Despite these perks, trust disputes are all too common. What’s worse, they threaten to use up valuable resources reserved for your loved ones.
What Are Trust Disputes?
A trust dispute is a disagreement regarding the administration or validity of a trust. In other words, heirs who are unhappy with the trust may decide to challenge its terms with the hope of overturning them.
There are several reasons why a trust may be contested. But if left unchecked, these disputes can have far-reaching consequences for trustees and beneficiaries alike. Disputes can lead to financial losses, broken relationships, and damaged reputations.
To prevent this, you should get in touch with a trust dispute attorney to assess your situation.
Understanding the Most Common Types of Trust Disputes
Trust disputes come in all shapes and sizes. While some are concerned with the basic construction of the trust, others relate to how the trust’s terms are executed. Generally speaking, the most common trust contests happen due to the following.
Misunderstandings
Even if a trust is well-structured, issues may arise if the beneficiaries and trustees do not see eye to eye. Misunderstandings or an acute lack of communication can cause a rift between the two parties, setting the stage for a trust dispute. An experienced trust dispute lawyer can work with you to draft clear instructions and recommend a neutral, third-party trustee.
Disinheritance
Disinheriting a loved one is a tough call to make. However, you may have good reasons to exclude certain people from your legacy. Once this happens, the disinherited heirs may contest the trust to claim their share of the property.
Trust Maker’s Capacity Issues
In this context, ‘capacity’ refers to knowledge and awareness. To create a trust, you must be fully aware of your financial situation and family dynamics. Only then can you decide who gets your assets. Otherwise, the trust will not be legally recognized.
Disagreement about the Way a Trustee Works (Mismanagement)
Some trusts may have multiple trustees who disagree about their control over the trust funds and properties. Since this can result in a serious dispute, you consult with a trust dispute attorney.
Undue Influence on a Trustor
A trust may be contested if the trustor was coerced, beguiled, or manipulated into establishing it. A close companion with nefarious intentions can compel the trustor to act against their will. If you suspect foul play or undue influence, investigate the situation immediately and talk to a trust dispute lawyer.
Potential Fraud or Forgery
Although trustees are charged with protecting the trust maker’s assets, they may not always be true to their word. Fiduciary fraud is a driving force behind several trust disputes.
Getting Help from Experienced Trust Dispute Lawyers
When it comes to trust dispute lawsuits, a lot can go wrong if you’re not careful. But a skilled attorney can come to your rescue. Depending on the situation, they will help you litigate or defend against a trust dispute claim.
Contact an Experienced Trust Dispute Attorney Today
At MHPS Law, our trust dispute attorneys understand the difficulties involved in contesting a trust. This is why we’re always ready to jump into action and help our clients in any way we can. For more information, reach out to our Tennessee law firm today.
