Common Types of Trust Litigation

Although proper estate plans are intended to make the distribution of an estate smooth and streamlined, they will always be subject to litigation brought by disgruntled family members and beneficiaries. Although it is foreseeable that a child who is left nothing might contest a will or trust purely out of spite, that may not always be the case. Elderly individuals are especially suspect, and may blindly follow the suggestions of people in the position of trust.

No one can be more litigious than a person who is refused what they feel is rightfully theirs, especially an entitled child who feels they are being treated unfairly. Although some children may be disinherited because they are so well-off by themselves, this is rarely the case. Whether the disinheritance is fraudulent, or due to reprehensible behavior, one can easily expect litigation from a disinherited child.

Disagreements may arise over various provisions of a Will. They can range anywhere from property descriptions and beneficiary identification to specific areas of the Will which may be vaguely worded or difficult to understand. Proper drafting is key to establishing the creator of the Will’s intent to extinguish and possibility of ambiguity. For example, when a Will gives “the painting on the wall to my daughter”, is the language referring to the Priceless Picasso, or the framed childhood fingerpainting.

Additionally, confusing designation of groups of beneficiaries can cause trouble. Class gifts to “my nieces and nephews” may not have intended to distribute gifts to nieces and nephews by marriage.

A Will or Trust can be declared invalid if it was not properly written, signed, witnessed or executed in accordance with the Law. Under Illinois Law, a Will must be noticed by at least two disinterested parties, however most practitioners will have a third witness. A disinterested party is an individual who will not receive any distribution from the Will. Although a will does not need to be notarized, most Wills contain an attestation clause, which, in combination with a notarization causes the will to be “self-proving.” When a will is self-proving, courts do not need to go through the time consuming process of having a witness to the will located and brought into court to ascertain the Will’s validity.

One of the requirements of creating a will or trust if for the person creating them to be of sound mind and memory. This is especially prevalent when estate plans are drafted for elderly individuals, who may be living in nursing homes or other long-term care facilities. This may cause one or more beneficiaries or heirs to contest the will, especially if beneficiaries of prior wills are cut-out entirely.

Mental capacity is the lowest form of mental capacity that we lawyers know, despite the importance of the documents. The elements of Mental Capacity to create a Will are:

• You must know the nature and extent of your bounty. In other words, who are your children, grandchildren, and relatives?
• Having the ability to form a plan in your mind. You must understand what a Will is and how your Will is directing the distribution of your estate.
• You must have knowledge of what property you actually own
• You must be aware of the overall scheme of you Estate Plan.

In some of the most unfortunate circumstance, Wills or Trusts will be executed under what is called “undue influence.” When the creator of a Will or Trust is pressured or coerced by any individual to make provisions or changes to their will or trust, the creator is considered unduly influenced. This is more prevalent in the elderly community, where elderly individuals are vulnerable to suggestion from people they trust. Family members or care providers, due to their close relationship with the creator will be under close scrutiny for undue influence, especially if a new will is executed before to the decedent’s death.

Although there is not a black and white definition for what is considered undue influence, you will most likely be able to recognize it when you see it. Consider the situation when an elderly person gives their entire estate to a live in caretaker, even though they might have a great relationship with their grandchildren who visit them every weekend. There is a presumption if there is a fiduciary relationship, and it the documents of a Will or Trust benefits that individual who acts as a fiduciary. If the lawyer who wrote the will receives some benefit from that will, that lawyer falls under the category “undue influence”

The trustee of a Trust and the Executor of a Will are required to follow to legal fiduciary duties. Because the Trustee and Executor are the only individuals legally allowed to gather and distribute assets, they have the opportunity to mishandle the administration of a Trust or Will, whether it is intentional or not. If these duties are not followed, Trustees and Executors open themselves to the possibility of litigation from beneficiaries of the decedent’s estate.

Creditors must always be paid before distributions can be made to beneficiaries. In order for Creditors to properly assert their claims to a decedent’s estate, they must be provided proper notice. However, if a decedent’s estate is distributed without paying creditors, a Creditor cane file a claim in the probate court to recoup its losses.

The firm of Bellas & Wachowski Attorneys at Law can help you make the necessary estate planning decisions in a cost-effective manner. Contact Attorney Tracy Ries at tracy@bellas-wachowski.com 847.823.9030 x221 for more information.