Beneficiary Dispute – Contesting a Trust in California

A beneficiary dispute is litigation over the division of assets in a trust or will. There are many reasons a beneficiary dispute might arise such as a will providing for the division of an asset that is no longer in existence or an asset that was disposed of before death. Generally, a beneficiary dispute is litigation between two or more beneficiaries who disagree over the division of an asset. It is not an action against the trustee or executor.

Additionally, even if all the beneficiaries agree about the distribution of an asset they may need to get court approval or petition the court if, for example, the will or trust is ambiguous.

You may have case even if the will or trust divides property differently than how you wish. For further discussion of possible claims you may want to read my other posts about estate and trust litigation. There are many possible ways you can litigate a dispute over the distribution of property. Obviously, the best outcome is if you can agree on a different distribution of assets than the will or trust provides. However, even you agree, you may need to petition the court to distribute the property differently than the will or trust.

There are just a few legally valid grounds for contesting a trust in California. The legally valid grounds for contesting a trust are similar to the grounds for contesting a will and include:

• Fraud 
• Undue influence
• lack of capacity
• Trust provisions that do not satisfy the legal requirements for establishing a trust

For example, you could contest a trust if an heir influenced the grantor to decrease the share another beneficiary would receive or to disinherit a beneficiary based on lies. The untruths are a form of fraud when done in order to increase one’s share in the estate. 

If the execution and signing of the document does not satisfy the legal requirements it is grounds for contesting the trust. Undue influence can occur when a caregiver or other person who spends considerable time with the grantor, especially during their final illness, encourages the grantor to change the terms of the trust in ways that increase the person’s share in the trust assets. 

A notice as required by Probate Code 16051.7 must be sent to all the beneficiaries of the trust and heirs in order to begin the 120-day period. If the notice is not sent, the clock on the 120 days during which a challenge to the trust is allowed does not begin to toll. When the notice is not sent, it is possible for a trust to be challenged after a longer period of time passes.

The legal rights of trust beneficiaries include receiving a copy of the trust document. If a beneficiary requests a copy of the trust document during the 120-day period following the receipt of notice, the 120-day period may be extended to allow time for review of the trust document. 

Contesting a trust in California is a complicated legal situation that requires the assistance of an experienced estate and trust attorney. If you are considering contesting a living trust in California, you should know that you must file within 120 days of when you receive the notice required by Probate Code 16061.7. If you do not file within the proscribed timeframe, you are forever barred from contesting the trust. 

If you believe that the grantor lacked the capacity to establish the trust or was unduly or fraudulently influenced to change the trust document in ways that deprived you of your inheritance or a share of your inheritance, you may want to contest the will. 

In the unfortunate circumstance when you cannot agree, and even if you can, the best option is to hire a estate planning attorney near you to help you navigate this complicated and detail-oriented area of law. Please, do not hesitate to contact me at (855) 529-7371 or [email protected] and we can determine the best way forward for your case.