Estate planning is when a person prepares for how they want their assets to be managed after they pass away (or in the event of incapacitation). Due to the complex and emotional nature of preparing for a departure from this life, many people get help from an experienced estate planning professional. One of the major focuses people have when creating an estate plan, is establishing a trust that can elude going through litigation in the future. Trusts are a great way for someone to organize how they want their legacy to be passed on to future generations.
Here are some tips to consider when trying to avoid trust litigation:
Confirming Legal Capacity of Trustor
Trust litigation can arise if there are issues regarding the legal capacity of the trustor. If the trustor was unwell or not able to make sound judgements, the trust instructions may be in question. To resolve this dispute, the court must decide the validity of the trust based on the health of the trustor. It is important to ensure that the trustee is of sound mind and body before finalizing trust documents.
Eliminating Undue Influence or Coercion
Unfortunately, many people get taken advantage of when creating a trust. If there is evidence that the trustor was under pressure or coerced in some way by the trustee or another party, then trust litigation is probably going to result. The trustor may have been influenced to include a beneficiaries name or provisions that are in another’s best influence.
Communicate with Beneficiaries
After a loved one passes away, conflicts can easily arise between loved ones. Beneficiaries may get upset if they feel like another relative received more than their fair share of the assets. But by then, the trustor has passed on and that leaves the family to dispute the trust amongst themselves. To avoid trust litigation, trustors may want to communicate openly with their beneficiaries about what to expect in the future. In this way, any questions or concerns can be addressed.
Fulfill Trustee Duties Responsibly
A common reason that trust litigation occurs is when the appointed trustee is not carrying out the duties as described in the trust, in a respectable and responsible manner. In fact, a trustee may actually act in a way that is in his or her own best interests, and not of the beneficiaries. However, in order for the trustee to manage the assets properly, the trustor must write clear and non-vague instructions so there is minimal chance for confusion.
Consult with an Estate Planning Professional
Trust litigation can be expensive and take many months to resolve, adding unnecessary frustration to loved ones who will already be going through a period of grief. Trustors who want to decrease the chances of their trust going through litigation, can consult with an estate planning professional for advice. This person can look over the trust to see that the trustor’s rights are being protected, in addition to leaving little room for dispute in the future.
Thank you to the experts at Klenk Law for their input on estate planning.