Chances of Successfully Contesting a Trust in New York City

The chances of successfully contesting a trust in New York are a little bit lower than successfully contesting wills. This is because trusts are usually meticulously drafted by lawyers, but do not require a strict formality for execution, except for the usual acknowledgment before the notary or executed before two witnesses. Wills, on the other hand, may or may not be drafted by lawyers, and its execution requires a very strict formality with state laws in order for it to be valid. For this reason, there are more chances of successfully contesting a will than a trust.

The Process for Contesting a Trust

Contesting a trust begins with the filing of a petition with the court with jurisdiction. In New York, the court with jurisdiction over the estate of lifetime trusts is the Surrogate’s Court of the county where:

• assets of the trust estate are located,
• the grantor was domiciled at the time of the commencement of a proceeding concerning the trust, or
• a trustee then acting resides, or, if other than a natural person, has its principal office (SCPA § 207).

Any interested party may file a petition to contest the trust. A person is an interested party if he stands to be financially affected by the trust.

Grounds for Contesting a Trust

The grounds for contesting a trust are similar to contesting a will: fraud, lack of capacity, undue influence, and improper execution. More details on the grounds can be found here.

Successfully Contesting a Trust

A trust is almost always meticulously drafted by a lawyer. The trust can be several pages long and contain very detailed provisions about the management of the trust, depending on the objectives of the grantor. During this period of drafting, the lawyer would have several communications with client that could gauge the grantor’s mental state, whether the grantor was under undue influence, or whether there was fraud upon the grantor. Because of these reasons, there is a smaller probability of successfully contesting a trust than a will.

In addition, a trust is more easily executed than a will. In New York, a trust must either be acknowledged before a notary public or in lieu thereof, executed in the presence of two witnesses who shall affix their signatures to the trust instrument (EPTL § 7-1.17). The will, on the other hand, requires certain formalities, such as having the testator declare to the witnesses that the instrument he is signing is his will, the witnesses to attest the testator’s signing of the will, and a self-proving affidavit to dispense of witness testimony during the probate of the will. For this reason, it is less likely that a trust is set aside on the ground of improper execution.

Still, a trust can be contested based on the grounds above, provided there is sufficient evidence to prove such ground. A lawyer with expertise in trust litigation can assist in these matters. Should you need assistance, we at the Law Offices of Albert Goodwin are here for you. We have offices in New York City, Brooklyn, NY and Queens, NY. You can call us at 212-233-1233 or send us an email at [email protected].

Factors That Affect the Probability of Success

The realistic probability of a successful trust contest depends on several factors. Cases with these characteristics tend to have higher success rates:

• Late-in-life amendments. A trust originally created decades ago that was amended shortly before the grantor's death, particularly when the amendment substantially favored someone the grantor became close to late in life, raises classic undue influence concerns.
• Cognitive decline. When medical records document significant cognitive impairment around the time of the trust amendment, capacity challenges have more traction.
• Isolation from family. When the alleged influencer isolated the grantor from family members who would have argued against the disposition, undue influence is more provable.
• The favored beneficiary's role in obtaining the document. If the favored beneficiary drove the grantor to the attorney's office, was present during consultations, paid the legal fees, or otherwise drove the planning process, the case for undue influence strengthens.
• Lack of independent counsel. If the favored beneficiary brought their own attorney to handle the grantor's planning, the appearance of impropriety is significant.
• Sudden, dramatic change in disposition. When the new trust is dramatically inconsistent with the grantor's long-stated wishes or with prior planning documents, the inconsistency is itself suspicious.

Cases with these characteristics: a grantor who was clearly competent, who used long-standing counsel, who left a disposition consistent with prior patterns, and who was not isolated from family — have low success rates regardless of how unhappy the disinherited family members are.

The Burden of Proof in Trust Contests

The contestant generally bears the burden of proving the grounds for contest. The standard is preponderance of the evidence — more likely than not — in most civil cases. The contestant must put on affirmative evidence; it is not enough to simply argue that the trust is suspicious without proof.

The exception is in cases where a "confidential relationship" existed between the grantor and the alleged influencer (close family member, caregiver, fiduciary, etc.) and "suspicious circumstances" surround the document. In those cases, a presumption of undue influence may apply, shifting the burden to the alleged influencer to show that the document was the product of the grantor's free will. This shifted burden can be decisive in close cases.

The 1404-Style Examination for Trust Contests

Unlike will contests, trust contests do not have a formal SCPA § 1404 procedure with built-in examination rights. But the substantive equivalent is available through ordinary discovery in the trust litigation. The contestant typically deposes:

• The drafting attorney.
• The witnesses to the trust execution.
• The notary.
• Family members and friends who observed the grantor around the time of execution.
• Medical providers who treated the grantor.
• The favored beneficiary.
• Anyone else with relevant knowledge.

Discovery in trust contests can be extensive and expensive. The investment in discovery is justified by the higher stakes of the case, but it should be matched to the size of the dispute.

The Strategic Value of Filing Even a Weak Contest

Even contests with low probability of full success sometimes produce meaningful settlement value. The reasons:

• The contest creates uncertainty that pressures the favored beneficiary to compromise.
• Discovery generates information that may strengthen the contest or reveal previously unknown facts.
• The cost and delay of defending the contest can encourage settlement.
• The risk of an adverse outcome, even if low, can be enough to motivate the favored beneficiary to negotiate.

Settlement value depends on the specific case. Some contests are clearly worth pursuing for settlement leverage. Others are not, particularly when the favored beneficiary is willing to litigate and the contestant has limited resources.

The No-Contest Clause Risk

Many trusts include in terrorem (no-contest) clauses that disinherit a beneficiary who challenges the trust. The clauses are enforceable in New York, with limited exceptions. A beneficiary considering a contest must weigh:

• What the beneficiary stands to receive under the current trust.
• What the beneficiary would receive if the contest succeeds.
• The probability of success.
• The cost of the contest.
• The downside if the contest fails and the no-contest clause is enforced.

For beneficiaries who would receive nothing or very little under the current trust, the downside is small and a contest may be worth pursuing. For beneficiaries who would receive a substantial share under the current trust, the no-contest clause may make the contest economically irrational.