As trust contest lawyers, we represent people who are contesting a trust as well as people who are defending a trust in New York City.
To contest a trust, the party must have legal standing. Interested persons are the only persons with legal standing to contest a trust. Interested persons are usually persons who are negatively affected financially with the establishment of the trust. Examples of these interested persons are beneficiaries, the heirs of the trust grantor, creditors, and previous beneficiaries of a revoked trust. In some cases, a grantor may also be considered an interested party who can petition to invalidate his own irrevocable trust.
The grounds for contesting a trust are similar to a will contest: lack of capacity, undue influence, improper execution, fraud, and forgery.
A grantor lacks capacity to establish a trust when it is shown that the grantor does not know: (a) the extent and nature of his property; (b) his relationship with his relatives, beneficiaries, and other people affected by the trust; and (c) how the trust is set up.
Usually, lack of capacity is reflected through medical records, where the grantor is suffering from mental illness such as dementia or Alzheimer’s or was taking mind-altering medication.
When there is undue influence, the trust can be invalidated on the reasoning that the trust that was established by the grantor did not reflect the grantor’s true intentions. Usually, this requires proof of motive, opportunity, and the actual exercise of undue influence.
Motive is apparent when the trust beneficiary who stands to substantially benefit from the trust is the influencer. Opportunity to influence the grantor can be seen from frequent interactions with the grantor, isolation of the grantor, the grantor’s declining health, the grantor’s dependence on the influencer, and the influencer’s management over the grantor’s finances. Actual exercise of undue influence can be gleaned from the direct involvement of the influencer in the establishment of the trust by procuring the attorney, notary or witnesses.
Under New York law, a trust must be in writing, signed by the grantor (the person establishing the trust) and the trustee, and either notarized or executed in the presence of two witnesses. In the absence of any of the above requirements, the trust can be contested as invalid.
In addition, even if the trust complies with the above, if no property is transferred to the trust, the trust is ineffective. Property is transferred to the trust when the grantor transfers property to the name of the trustee, as trustee of the trust. An example of a proper transfer would be from X, Grantor, to Y, Trustee of the XYZ Trust. This signifies that Y is not holding the property personally in the concept of an owner, but as a trustee, and that the trust owns the property.
Sometimes, a grantor may contest an irrevocable trust on the ground that the grantor was defrauded by a third person into establishing the trust. An example would be a grantor who is given false information regarding the establishment of a charitable trust and who did not know that the property in a charitable trust would not revert back to the grantor anymore.
Other grounds such as duress and forgery can be used to contest a trust, but they are less common.
New York trusts are private trusts that are not publicly recorded. As such, heirs or distributees of a grantor may not know that the grantor has left property to a trust. These heirs or distributees might even believe that the grantor died, leaving no property. For this reason, finding out whether a trust exists is important.
To do this, the heir or distributee must first seek an appointment from the court to be the personal representative of the deceased grantor’s estate. With the issuance of letters testamentary or letters of administration, the personal representative now has the authority to search and discover the assets of the deceased relative to see whether they have been transferred to a trust, and whether such transfer can be invalidated on the grounds stated above, such as undue influence, improper execution, or lack of capacity.
As in all areas of litigation, your trust contest will rely on the strength of your evidence. If no confidential relationship exists between the beneficiary and the trust maker, you will have the burden of proof to prove that the trust must be invalidated. Medical records are usually obtained during discovery proceedings to determine the trust maker’s capacity. Medical records will show the doctor’s findings and any medication the trust maker was taking at the time the trust was executed. Other relevant documents, correspondences, and notes may also be obtained during discovery.
Should you need legal representation in filing a trust contest, 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 send us an email at [email protected] or call us at 212-233-1233.