When Can Heirs Challenge Trust Distribution Terms?
Estate planning is a powerful tool for safeguarding assets and making sure that they’re distributed according to the wishes of the individual creating the trust. However, disputes may arise when heirs feel the terms of the trust are unfair or have been improperly executed.
Under Maryland law, there are specific circumstances under which heirs may challenge trust distribution terms.
At our firm, Sanders & Sanders, Attorneys at Law located in Upper Marlboro, Maryland, we offer over 30 years of experience with estate planning. Understanding these situations can help you work through these complicated issues with greater clarity. Read on to learn more about these issues with estate planning.
A Rundown of Trusts and Their Purpose
A trust is a legal arrangement that allows one party, known as the trustee, to hold and manage assets for the benefit of another party, the beneficiary.
The creator of the trust, often called the grantor or settlor, outlines the terms of the trust, including how and when assets should be distributed. Trusts are often used to avoid probate, reduce taxes, and provide financial security to loved ones.
Despite their benefits, disagreements may arise among heirs, especially when they suspect that the terms of the trust are unfair, unclear, or improperly executed. That’s where legal professionals and their knowledge of the law can step in. In Maryland, heirs have the legal right to challenge trust distribution terms under certain conditions.
Grounds for Challenging Trust Distribution Terms
Maryland law provides several legal grounds for heirs to challenge trust distribution terms. It’s important that individuals know the legal grounds they have in order to fully defend their rights. Some of the grounds for challenging trust distribution terms can include:
Lack of capacity: The grantor must have been of sound mind when creating the trust. If heirs can demonstrate that the grantor lacked mental capacity due to illness, age, or other factors, they may have grounds to contest the trust.
Undue influence: Heirs may challenge a trust if they believe the grantor was coerced or manipulated into creating or altering the terms of the trust. Evidence such as sudden changes to the trust or the involvement of individuals who stood to gain significantly can support this claim.
Fraud: If the grantor was misled or deceived into creating or modifying the trust, heirs can challenge its validity. Fraudulent behavior might include falsifying documents or misrepresenting facts.
Improper execution: Trusts must comply with Maryland’s legal requirements to be valid. If a trust lacks proper signatures, witnesses, or notarization, heirs can argue that it was improperly executed.
Breach of fiduciary duty: Trustees have a legal duty to act in the best interests of the beneficiaries. If a trustee mismanages assets, acts dishonestly, or otherwise breaches their duty, heirs may challenge the trust’s administration.
Signs That Heirs Might Have Grounds for a Challenge
If you suspect the terms of a trust are unfair or invalid, it’s important to recognize potential warning signs. That way, you can take steps to protect your assets without threat. Some of the warning signs we recommend you look for are:
Sudden or unexplained changes to the trust.
Exclusion of long-time beneficiaries without clear justification.
The involvement of a trustee with a history of questionable behavior.
Lack of communication or transparency from the trustee.
Evidence that the grantor was vulnerable to manipulation.
Steps to Challenge Trust Distribution Terms
Challenging a trust in Maryland involves several steps. While each case is unique, the process generally includes the following:
Review the trust document: Obtain a copy of the trust and review its terms carefully. Look for inconsistencies, unclear language, or provisions that may raise questions about the grantor’s intent.
Gather evidence: Collect documentation and other evidence that supports your claim. This might include medical records, correspondence, or witness statements.
Consult an estate planning attorney: An experienced attorney can provide valuable guidance, helping you understand your rights and the strength of your case.
File a complaint in court: If you decide to move forward, your attorney will file a petition with the appropriate Maryland court, outlining your reasons for challenging the trust.
Participate in mediation or litigation: In some cases, disputes can be resolved through mediation. If not, the matter may proceed to litigation, where a judge will determine the outcome.
Common Misconceptions About Trust Challenges
Misunderstandings about trust challenges often discourage heirs from pursuing valid claims. Below are some common misconceptions and the truths behind them:
Misconception: "A trust can’t be contested."
Truth: Trusts can be contested under certain legal grounds, such as lack of capacity or undue influence.
Misconception: "Only beneficiaries can challenge a trust."
Truth: Heirs who aren’t named beneficiaries may still have the right to challenge a trust if they believe it was created or amended improperly.
Tips for Preventing Trust Disputes
Preventing trust disputes starts with thorough estate planning. Here are some steps grantors can take to minimize the likelihood of challenges:
Communicate clearly: Discuss your intentions with heirs and beneficiaries to reduce misunderstandings.
Work with a qualified attorney: Collaborating with an estate planning attorney assures that your trust complies with Maryland law and reflects your wishes accurately.
Update your trust regularly: Life events such as marriage, divorce, or the birth of a child may warrant changes to your trust. Keeping it up to date reduces the risk of disputes.
Include a no-contest clause: This provision discourages heirs from challenging the trust by threatening to disinherit anyone who files a frivolous claim.
What Happens If a Trust Challenge Is Successful?
If a trust challenge is successful, the court may take one of several actions, depending on the circumstances:
Modify the trust: The court might amend specific terms to align with the grantor’s intent.
Invalidate the trust: In cases of fraud or undue influence, the court could declare the entire trust invalid.
Remove the trustee: If a trustee is found to have breached their fiduciary duty, they may be replaced.
Redistribute assets: The court may order a new distribution of assets to reflect the grantor’s original intentions.
Why Legal Guidance Is Crucial
Challenging a trust can be emotionally and legally intricate. As experienced estate planning attorneys, we’ve helped countless Maryland families work through these sensitive issues. Our firm is dedicated to providing compassionate, knowledgeable guidance every step of the way.
We understand that trust disputes often involve deeply personal matters. Whether you’re an heir seeking justice or a trustee looking to uphold the grantor’s wishes, we’re here to help you find the best path forward. With years of experience in estate planning and trust litigation, we’re equipped to handle even the most challenging cases with professionalism and care.
Contact Us for Aid With Estate Planning
At Sanders & Sanders, Attorneys at Law, we believe that by understanding your rights and seeking legal guidance, you can protect your interests and those of your loved ones. Whether you’re creating a trust or disputing its terms, planning and communication are key to achieving a fair outcome. Our firm serves clients throughout Upper Marlboro, Clinton, Bowie, Fort Washington, Largo, and Washington D.C, Maryland. Contact us for assistance with estate planning today.