In California, trusts are common estate planning tools used to manage and distribute a person’s assets both during their lifetime and after death. However, despite their intentions to simplify inheritance and minimize probate court involvement, trusts can sometimes become the subject of legal disputes. Trust litigation arises when parties challenge the validity, administration, or terms of a trust.
If you find yourself involved in a trust litigation dispute, it’s critical to understand the law, your rights, and the steps you should take to protect your interests. At Slater Cosme, PC, we help our Pasadena clients through trust disputes and litigation. Here, we’ll discuss common causes of disputes, key legal principles, procedures, and practical steps to take.
What Is Trust Litigation?
Trust litigation refers to the legal process through which beneficiaries, heirs, trustees, or other interested parties challenge or defend various aspects of a trust. These disputes are typically resolved in probate court and may involve allegations such as mismanagement of trust assets, undue influence, fraud, or breaches of fiduciary duty.
Litigation can occur while the settlor (the person who created the trust) is alive, especially in cases of a revocable living trust, or after the settlor’s death, when the trust becomes irrevocable and its terms are set in stone.
Common Reasons for Trust Disputes
There are many scenarios in which a trust dispute can arise in California. Some of the most common causes include:
Contesting the Validity of the Trust
Beneficiaries or heirs may challenge the trust on various grounds, such as:
Lack of capacity: Alleging that the settlor wasn’t mentally competent when they created or amended the trust.
Undue influence: Claiming that someone manipulated or coerced the settlor into making changes that benefited them unfairly.
Fraud or forgery: Alleging that the trust documents were altered or signed under false pretenses.
Improper execution: Trusts must meet certain legal requirements in California to be valid. Failure to do so can render a trust invalid.
If any of these grounds are proven, the trust can be declared invalid.
Breach of Fiduciary Duty
Trustees are legally obligated to act in the best interests of the beneficiaries. A breach of this obligation occurs when the trustee misuses or misappropriates trust assets, fails to provide required accounting, makes negligent or risky investments, shows favoritism among beneficiaries, or charges excessive trustee fees.
Disputes Over Trust Interpretation
Ambiguous language or conflicting provisions in the trust document can lead to disagreements about the settlor’s intent, particularly when distributing assets.
Beneficiary Disputes
Beneficiaries may dispute the inclusion or exclusion of other beneficiaries, argue over unequal distributions, or claim that changes to the trust were made under suspicious circumstances.
Disputes Regarding Trust Accounting
California law requires trustees to keep accurate records and periodically report financial information to the beneficiaries. Disputes can arise when accountings are late or incomplete, transactions appear improper, or the trustee refuses to provide information.
Working through trust litigation can be an intricate and emotionally charged process. Understanding the common causes of disputes, from challenging the trust's validity to disagreements over trustee duties or asset distribution, is the first step in addressing these issues.
Legal Principles in California Trust Litigation
Understanding the legal structure of trust litigation in California can help you traverse the process more effectively.
Probate Court Jurisdiction
California probate courts, operating under the California Probate Code, manage trust litigation concerning trust validity, trustee conduct, beneficiary rights, and the interpretation and enforcement of trust terms.
Statute of Limitations
There are strict deadlines for filing trust litigation:
120-day rule: If a trustee sends a valid notice under Probate Code §16061.7, a person has 120 days from the date of the notice to contest the trust.
3-year rule: If no notice is given, the general rule is a three-year statute of limitations from the time the person knew or should have known about the trust.
Timely legal advice is critical—missing a deadline could permanently bar your claim.
Burden of Proof
In most trust contests, the person challenging the trust bears the burden of proof. They must present sufficient evidence to support their claims, whether it's proving lack of capacity or undue influence.
For successful trust litigation in California, a thorough grasp of the law is crucial. This includes understanding the jurisdiction of probate courts and key statutes of limitations. Strict adherence to deadlines is vital; failure to meet these can irreversibly harm a claim. The challenger typically bears the burden of proof, requiring strong evidence to substantiate their claims.
Due to these intricacies, prompt legal advice is indispensable for effective management and favorable outcomes in trust disputes.
The Trust Litigation Process in California
Litigating a trust dispute involves multiple legal steps. First, hiring an attorney with knowledge in probate and trust law is essential due to the intricacies of trust litigation. A qualified lawyer can evaluate your case, determine your legal standing, help gather evidence, draft and file legal documents, and represent you in court.
To begin trust litigation, your attorney will file a petition in the probate court. This petition outlines your legal claims and the relief you’re seeking, such as removing the trustee or invalidating the trust. Once filed, the petition must be served to all interested parties, including trustees, beneficiaries, and possibly heirs. Proper notice is critical to allow everyone a chance to respond.
Opposing parties may file objections or responses. The discovery process then allows both sides to request documents, take depositions, and gather evidence. Before trial, courts often encourage mediation—a process where a neutral third party helps resolve disputes without litigation. Many trust cases settle during this stage, saving time and money.
If mediation fails, the case proceeds to trial. Unlike jury trials in civil or criminal cases, trust disputes are usually heard and decided by a judge in a bench trial. The judge will hear evidence, legal arguments, and render a decision.
Finally, if one party disagrees with the outcome, they may file an appeal. Appeals must be based on legal errors made during the trial, not simply dissatisfaction with the result.
Alternatives to Litigation
Not every dispute needs to end in court. Alternatives include:
Mediation
A voluntary and confidential process that often resolves disputes efficiently and amicably. Many California courts mandate or strongly encourage mediation in trust disputes.
Arbitration
Similar to a trial but conducted privately with an arbitrator. Arbitration decisions are typically binding and can save time and costs.
Settlement Agreements
Parties can agree to modify or interpret a trust without court intervention if all interested parties agree and the trust allows it.
Choosing the right alternative dispute resolution method depends on the specific circumstances of your trust dispute. Consulting with an attorney knowledgeable in trust litigation can help you work through these options and determine the proper course of action for your situation.
Trust litigation in California can be an intricate and emotionally charged process. Whether you're a trustee trying to fulfill your duties or a beneficiary contesting perceived injustices, it's vital to understand your rights, the legal process, and the consequences of every action you take.
Contact Our Firm Today
The first step is to consult a trust litigation attorney who can guide you through the process, represent your interests, and work toward a favorable resolution—either in or out of court. Slater Cosme, PC serves clients throughout Pasadena, California, and we’ll support you with trust litigation. Contact our firm today for a consultation.
