Based on recent reports, more than 75 percent of Americans hope to leave behind inheritances for their loved ones. For those whose estates and family situations are particularly complex, a trust may be the best option. Trusts allow people more control over their assets and how they’ll ultimately be distributed among beneficiaries. They can also give grantors and their beneficiaries an array of other benefits, such as avoiding probate and protecting assets from creditors to name a few.
Though trusts can help families avoid quite a few legal issues, they’re not exempt from judicial hurdles. Trust disputes are more common than many people may think, and they can lead to an array of problems. A legal dispute over a Trust document can cause delays in beneficiaries receiving their inheritances, and the expenses it brings about may whittle away at the assets that were supposed to benefit the grantor’s loved ones. The following legal insights and solutions may help you better understand trust disputes and how to overcome them.
What Causes Trust Disputes?
Trust disputes can be caused by several factors. In many cases, they stem from someone believing they didn’t get a fair share of a family member’s estate or people being left out of an inheritance altogether. Disputes often arise if people feel that loved ones were unduly influenced by outside forces when creating their trusts. If family members believe their loved one wasn’t of sound mind when they created a trust, that’s grounds for dispute as well.
Beyond those factors, people may dispute trusts if they believe the trustees in charge of them aren’t managing them properly. Of course, if a trustee is believed to have abused the assets in a trust for his or her own financial gain, that could also be cause for dispute. Some disputes arise because of unclear terms in their official legal documents. Those are a few of the most common causes of disputes, but certain other conflicts can also come into play.
Resolving Trust Disputes
As mentioned, trust disputes can delay inheritances, cause financial difficulties for beneficiaries, and lead to strained relationships among family members along with many other problems. Resolving them as quickly and effectively as possible is essential. Keep in mind that not all disputes escalate into full-blown legal battles. An estranged family member who’s angry about not receiving an inheritance can’t simply stop a grantor’s estate from being distributed to its beneficiaries.
That being said, if a person has legitimate grounds and enough supporting evidence to proceed with a dispute, there are a few ways to handle the situation. For one, a mediator can be called in to help. This unbiased third party may be able to help beneficiaries and those disputing the trust to resolve their differences. Alternatively, those involved can turn to an arbitrator. Much like mediators, arbitrators hear all sides of an argument and determine how to best resolve the issue. Arbitration is a more formal process than mediation, and its results are more absolute.
For disputes that can’t be resolved through mediation or arbitration, litigation is the next option. That involves a lengthier, more involved process of investigating the trust in question, its surrounding circumstances, and the claims made by the contestant. Though litigation often ends with an out-of-court settlement, it sometimes proceeds to trail.
Effectively Handling Trust Disputes
While trusts are legally binding arrangements with several benefits for both grantors and their beneficiaries, trust disputes are fairly common. Not all disputes are valid, but those that are can be resolved via mediation, arbitration, or litigation. Whether you’re disputing a trust or defending one against a dispute, having an attorney on your side is crucial. At the same time, working with an attorney when creating a trust can help grantors ensure there’s no room for disputes when the time comes for their estates to be distributed to their loved ones.
