Questions for Discussion
- What legal standing and grounds are required to attack a
will and a trust?
- What standard of proof is required when attacking a will or
- What are the allowable time periods for attacking wills and
- Is it easier to contest a will than a trust?
Standing to Challenge a Will and a Trust
A contesting plaintiff must demonstrate some relationship to the controversy that gives him or her a legal right to bring the action in order to start a lawsuit. This right to bring suit is called standing. Generally, surviving spouses, potential heirs, and others who would materially benefit have the standing to initiate a will contest.
Almost anyone with a relationship to be decedent, who has a legitimate claim, can contest a will by filing an objection. This procedure is relatively uncomplicated and simple to initiate.
In a typical estate winding proceeding, potential contestants are literally invited to file objections to the will by statute that is designed to facilitate the procedure.
The risk of litigation is high in a setting that is designed to give a wide variety of people easy access to a legal forum. In our current climate of allowing plaintiffs the right to have their day in court, it is probable that most claims will be heard.
A question that often arises is whether or not the maker’s heirs can challenge a living trust while the maker is still living. Heirs have only a hope to receive a gift, they do not have a vested legal right in the maker’s property. In almost all instances where a maker has created a living trust, the maker has also executed a pour-over will. The pour-over will is designed so that any property not titled in the name of the trust will pass to the living trust through the estate winding up process.
The executor named in the pour-over will has standing to challenge the trust. However, since the executor is customarily a trustee of the living trust, the likelihood of a challenge is extremely low.
Under some circumstances, a pour-over will may designate heirs other than the beneficiaries named in the living trust. These heirs may have standing to attack the living trust. This is a primary reason why it is not good practice to name any heirs in a pour-over will who are different from the beneficiaries in the living trust.
The longer a living trust has been in existence, the more impervious it is to attack. If a living trust has been in existence for a period of time before the maker’s death, it is exceedingly difficult for a court to find that the trust was invalid from its onset. This is especially true if an “independent” trustee, such as a bank trust department, trust company, or a person who is not related to the maker, has been serving as a trustee of the maker’s trust.
In a will contest, the court is facing a totally different set of circumstances. There is no operating history to overcome, just the clear-cut legal standards that have determined the validity of wills for centuries. The court has the easier task of applying these standards and then affirming or denying the validity of the will.
Once standing is established, there has to be a legal reason to attack the validity of a will or trust. There are several fertile areas where these attacks take place. Sometimes, the mental capacity of the maker to enter into the document is questioned. In other instances, there are questions as to whether or not the maker has been subject to undue influence or duress or has mistakenly signed the document. The technical formalities of drafting and signing the document can also be attacked.
In order for a legal instrument to be valid, a person must have the requisite mental capacity to understand the nature of that instrument.
Undue Influence, Duress, and Mistake
There is no major distinction between setting aside wills or trusts on grounds of fraud, undue influence, duress, or mistake. The execution of a will or a trust should be voluntary and based on an individual’s wishes and desires. The longer a living trust has been in operation, the less likely it is that an attack on any of these grounds can be sustained. A trust maker who creates a living trust and places his or her property in it creates strong evidence that the trust is created according to his or her wishes. In contrast, a will is not put into use until the will maker is deceased. The courts are more likely to take a good, hard look at the contested will because they have a clean slate upon which to rule; there is no past history of actual operation to point to.
Legal Requirements for execution of a will
Any will that fails to conform substantially to the provisions of statute will be denied winding up even though the denial may mean that the intentions of the will maker will be deemed to have died without a will.
Most people would agree that it is inequitable to deprive a will maker of his or her right to leave property the way he or she wished merely because there has been a technical violation of a formal will requirement. Yet the formalities required to validate wills have been developed over centuries to protect their makers. The protection afforded by the law of wills can ultimately defeat its very purpose.
Some of the more important will formalities include a proper and sufficient signature by the maker, correct placement of that signature, publication to witness that the maker is indeed signing a will, capacity and qualifications of witnesses.
The reason that a will is “executed” instead of signed is that a formal ceremony and procedure must be followed. If the formalities are not observed, the will is subject to invalidation.
One of the major reasons that trusts provide fewer legal grounds for attack is that they do not have to be executed with the same formalities as wills. Development of the institution of the trust, and its great effectiveness in modern-day law, stems in large measure from the freedom from strict and formal requirements for its creation.
Trusts are flexible in their application and use because they are not subject to the rigid rules imposed on wills. They are less vulnerable to attacks based on technicalities.
Will contests can arise in one of the following situations:
- Where there is a second marriage and there are children by a first marriage.
- Where one child is favoured over the other children
- Where an individual has no close relatives
- Where a nonconforming personal relation, such as a homosexual or heterosexual lover, is named in the will rather than the family.
If an individual faces any one of these situations, it is imperative that he or she plans with the utmost care to reduce or eliminate the possibility that the planning will be successfully attacked. Rather than rely on the courts for protection, the prudent client should use a living trust-centred plan to minimize the possibility of successful litigation.
The Testamentary Nature of Trusts
Because living trusts can be used to pass a maker’s property to beneficiaries at the maker’s death, they can be viewed as testamentary in nature. Testamentary dispositions have long been the exclusive domain of wills. Thus, living trusts have been attacked on the grounds that they were not executed in the manner specified by will statutes.
This argument is no longer valid. The modern rule of law is that where a maker creates a living trust for a beneficiary but the beneficiary does not receive any interest in the trust until the death of the maker, the disposition is not testamentary.
The Burden of Proof required When Attacking a Will or a Trust
Who has the burden of proof in litigation is often a critical element that determines the success or failure of the parties. The word burden in this time-honoured legal phrase is no misnomer; it can truly be a burden to prove standing and specific requirements to commence an action much less meeting the legal burden in the courtroom.
In a will contest, the person who introduces the will to the winding up process generally has the burden of proving the will’s valid execution and attestation. The burden of proof may shift to anyone who contests the will once this burden is met. Only afterwards do the contestants of a will have the burden of establishing lack of testamentary capacity, undue influence, fraud, duress, mistake, and revocation.
The contestant of a living trust generally has the entire burden of proof. In this respect, attacking a trust is much like attacking a contract or a deed. This burden of proof makes it difficult for trust contestants to prevail.
The Confidentiality of Wills and Trusts
Living trusts avoid winding up of estates, and the affairs they handle are not a matter of public record. The size, nature, composition, and so on, of a trust maker’s estate are not available for general public scrutiny.
It is significantly more difficult for disgruntled heirs and parties to attack a trust when its contents are not open for inspection. There is less incentive for avaricious heirs to attack a trust whose value cannot be ascertained.
Challenges by dissatisfied heirs are reduced by the confidential nature of fully funded living trusts. One cannot possibly overestimate the value of the confidential nature of trusts in protecting the intentions of their makers and the interests of their beneficiaries. The privacy that is endemic to a trust gives overwhelming advantages over the traditional will-planning/estate winding up an alternative.
Limitation Periods for Contesting Wills and Trusts
Will-planning/estate winding up does enjoy one potential advantage over a trust in terms of litigation. A person who decides to commence a will contest generally has less time to bring an action than a person who challenges a living trust. The period for contesting a will is typically less than a year. Depending on circumstances, the period for contesting a trust may extend up to several years.
Because will statutes reduce the time within which a contest can be bought, the argument can be made that litigation is reduced. The opposite argument can be used against living trusts. However, having more time to bring a lawsuit cannot make the facts any better to create necessary legal standing.
The passage of time between the existence of the trust and the commencement of any lawsuit can work to the disadvantage of the plaintiff. This is particularly true if the contestant has accepted benefits from the trust.
Will-planning/estate winding up encourages litigation. Living trust-centred planning gives more assurance that planning efforts will be free of litigation.
DR MERVIN MESSIAS
JD (Juris Doctor) / BA, LLB (Wits) / TEP (Trust & Estate Practitioner) / MTP (Master Tax Practitioner – S.A)