In the emotionally charged time after a loved one’s passing, a trust is supposed to simplify the process of asset transfer and keep the family peace.
Yet, the reality for many families in the Chicagoland area is that sometimes there are concerns around changes to the trust or the way the trust is being handled that can justify a challenge in court.
By challenging a trust, the challenger is seeking the court to invalidate the trust entirely, or to invalidate a specific amendment or trust-related transaction. It’s not enough to be unhappy with a trust distribution, or to challenge because you were left out of the trust.
Courts aren’t interested in whether a trust is fair. They generally start with the assumption that the trust reflects the grantor’s wishes, which makes it difficult to successfully challenge a trust.
Contesting a trust is a serious matter, one that requires strong evidence of wrongdoing or misconduct to win a trust lawsuit case.
Who Can Challenge a Trust in Illinois?
Not just anyone can challenge a trust. In Illinois only interested parties with standing, that is a financial interest in the trust, are able to raise a challenge.
In most cases, challenges are brought by beneficiaries, former beneficiaries, heirs-at-law, or other interested parties who could be affected by the outcome.
That means that if you have been intentionally left out of a trust, you cannot challenge simply because you believe you should have been included.
Likewise, those who are dissatisfied with their distribution amount cannot challenge on the basis that they believe the distribution is “unfair”. Challenges must be rooted in evidence that shows the trust does not reflect the grantor’s true wishes.
It’s worth mentioning that some trusts may contain a “no-contest” clause, intended to keep family members and beneficiaries from filing challenges. However, these clauses may not always be enforceable based on the circumstances of the dispute.
An experienced estate litigation attorney can review the trust documents, evaluate your standing, and whether or not there is a legitimate basis for contesting a trust.
The Most Common Grounds for Contesting a Trust
Dissatisfaction alone isn’t enough to justify a trust contest. There must be a legally recognized reason for challenging the trust.
Lack of Capacity
A challenge can be made when there is evidence that the settlor of the trust did not have the mental capacity to understand what was happening when creating or altering the trust.
This type of challenge often occurs when there are late changes made to a trust that benefit a sole beneficiary at the expense of others, or removes a beneficiary, shortly before the grantor’s passing.
For example, if an elderly Alzheimer’s patient makes a change to their trust that removes one of their children days before they pass away, other beneficiaries may be able to raise a claim of lack of capacity.
However, proving lack of capacity often relies heavily on medical records and diagnoses that can help demonstrate the grantor’s diminished mental state.
Undue Influence
Undue influence occurs when someone puts pressure on the trust grantor to either structure or change the trust terms to reflect their own wishes, rather than the grantor’s true wishes.
An example of this could be a caregiver who threatens to withhold care, pressuring the grantor into making them the primary beneficiary.
Signs of undue influence include sudden changes to the trust, isolation from the family, and secret meetings with attorneys.
Closely related is duress or coercion, which is a direct threat or intimidation of the grantor in order to change the trust.
Fraud
Even with a trust, fraud can still occur. If the trust creator is deceived into signing or changing the trust through misrepresentation, false statements, concealed documents, or forged signatures, Illinois law can invalidate the changes and potentially the trust itself.
Improper Execution
Improper execution is more technical than undue influence or lack of capacity, but can still be valid grounds for contesting a trust. When proper legal formalities are not followed, a trust litigation attorney may be able to make a case in court for invalidating the trust.
Trustee Misconduct
If there is evidence that the trustee is violating their fiduciary duties, beneficiaries can seek court intervention.
Some common forms of trustee misconduct include self-dealing (using the trust property or cash for personal gain), commingling personal assets with trust assets, and refusing to provide an accounting to beneficiaries.
Depending on the circumstances, the court can order an accounting, remove the trustee, or require repayment of improperly used trust assets.
How to Challenge a Trust In Court
In Illinois, there are time limits for contesting a trust.
In a revocable trust that becomes irrevocable upon death, a petition must be brought to the probate court within two years of the trust grantor’s passing. Under certain other circumstances, it can be as little as six months after the trustee has notified the beneficiaries.
Medical records become harder to obtain over time, witness memories fade, and crucially, trustees may already be distributing assets.
When an interested party believes they have a valid reason to challenge a trust in court, they should act quickly to begin the trust litigation process.
Step 1: Case Review by a Trust Litigation Attorney
The person bringing the challenge must have a financial stake in the trust, and the first thing an attorney will do is verify the person’s standing.
If they have a legitimate claim, then the trust dispute lawyer will begin looking at the case evidence. They may examine medical records, interview family members, and review the trust documents and any changes made to them.
During the case review, the attorney will give their client an estimate of the potential damages and the likelihood of success. In some cases, the cost of challenging the case may not justify the potential damages. An experienced trust litigation attorney will be frank and upfront with their client about pursuing the case further.
Step 2: Filing the Lawsuit
If the decision is made to proceed, the challenger must file a petition in the local Illinois probate court. Trust lawsuit cases must state the specific grounds for challenging the trust or invalidating an amendment.
Step 3: Discovery
The most crucial phase of the trust litigation process is the discovery phase. This is where your trust litigation attorney gathers the evidence to support your case.
For claims of lack of capacity they may seek medical records that can help demonstrate that the trust settlor wasn’t capable of understanding the changes being made or the documents signed.
They may try to obtain financial records, emails and text messages, or communications with attorneys regarding the preparation of the trust or trust amendments. Witness deposition or testimony may also be useful to the case.
Step 4: Settlement Negotiation
The trust litigation process is notoriously time consuming. A contested trust that proceeds all the way to trial and resolution can take years. Over that amount of time, litigation can become extremely costly.
Because of the potential time and financial drain of litigation, negotiation becomes a key part of the trust dispute resolution process.
Trust disputes can be emotional and intense. Having an attorney lead negotiations also helps minimize the strain on families.
Step 5: Trial
If negotiating a settlement is unsuccessful, then the last option is to move to trial. At this point, the burden of proof is on the challenger.
Courts generally presume that the trust documents reflect the grantor’s wishes unless there is sufficient medical, documentary, or circumstantial evidence or testimony to prove that the trust should not be enforced as written.
What Happens If a Challenge Succeeds?
What actually happens if a trust challenge is successful depends on the grounds for the challenge. Common outcomes include invalidation of the entire trust, invalidating a specific amendment, or restoring a prior version of the trust.
In cases of trustee misconduct, an accounting can be ordered and the trustee removed. If it is proven that the trustee used trust funds for their own benefit, they may be ordered to pay that money back, and potentially pay damages to the beneficiaries.
Trust lawsuit cases are generally civil cases, so even if undue influence or lack of capacity is proven, it’s highly unlikely that any criminal penalties would be issued. However, if there is clear evidence of exploiting an elderly person for financial gain, separate criminal charges can be brought.
Staza Law: Experienced Chicago Trust Litigation Attorneys
Clients often come to us believing that they have a right to challenge a trust for reasons like “dad promised me the house”, or “mom said everything would be split equally”.
The truth is that trust contests are not about “fairness”. A trust cannot be contested simply because a beneficiary is unhappy with the way distributions were stipulated, or because they felt they were unfairly left out of the trust.
Contesting a trust is about whether or not the settlor’s true wishes were reflected at the time the trust was created or amended.
If you are a trust beneficiary or heir who believes there has been undue influence, lack of capacity, trustee misconduct, or that action has occurred that has altered the original intentions of the trust grantor, then consider speaking with a trust and estate litigation attorney.
Remember, depending on the details of the case, there is a timeline for contesting a trust. Staza Law helps families in the Chicago area navigate the trust dispute resolution process. We can listen to your case, determine if you have standing, and help you understand if pursuing litigation is the right move.
Contact Staza Law today for an initial consultation, and let us help you understand if your case meets the grounds for contesting a trust.