Establishing a trust is a solid way to approach estate planning. It is a formal and lawful document that enables your beneficiaries to legally inherit your assets and properties. However, trusts are not free from problems.
Beneficiaries and would-be beneficiaries can challenge a trust if it has any of these issues.
The trustor was under the influence of another party
A person hoping to inherit part or majority of the trust may use undue coercion. They can do so through physical threats or emotional extortion, among other manners of unjustifiable persuasion. A beneficiary can challenge a trust if they can prove someone influenced or pressured the trustor into agreeing to certain conditions and removed the trustor’s agency or free will.
The trustor is lacking full mental capacity
Any kind of contract or legal document becomes void when there is evidence that the signatory does not have full mental capacity. Mental and physical illness impairs a person’s judgment and can invalidate their decisions.
There has been a breach of fiduciary duty
In creating any trust, a trustor assigns a trustee to administer estate planning procedures upon death. A breach of fiduciary duty means the trustee abuses their power through fraud, negligence, misappropriation, unreasonable compensation or mismanagement. According to Nevada law, the beneficiaries can relieve the trustee of their duties and liabilities if they find the trustee’s administration questionable or fraudulent.
As comprehensive as a trust may be, it may not be free from issues that can have longstanding negative effects on you and your family. Be aware of the initial drafting of the trust and any revisions that may directly impact your stake on your loved one’s estate. These are their final wishes, so you should make sure they are fulfilled.