You may have some impressions about trusts that are not entirely accurate. One misconception out there is the notion that a living trust cannot be contested.
Before we get into this specific topic, we should explain a few general things about the value of revocable living trusts. This type of trust is useful for people who want to facilitate efficient asset transfers to their loved ones. It could be looked upon as an alternative to a last will as a primary vehicle of asset transfer.
A will is subject to the process of probate, and while probate is not all that bad in Pennsylvania, it is time-consuming. It will take perhaps nine months to a year if the case is not complicated in any way, and the heirs cannot receive their inheritances during this interim.
With a revocable living trust, the trustee that you name would follow the instructions that you leave behind in the trust declaration after your passing. Assets would be distributed to the beneficiaries in accordance with your wishes, and probate would not be a factor. As a result, assets could get into the hands of your beneficiaries in a more timely manner.
This is one benefit, but another benefit is the fact that you can instruct the trustee to mete out resources over an extended period of time to prevent the beneficiaries from squandering their inheritances. Plus, the trustee would be managing the assets in the trust, and this could protect the beneficiaries from bad decision-making.
Challenging a Living Trust
There are those who are under the impression that you cannot challenge a revocable living trust, because the probate court is not involved in the administration of the trust. In fact, this is not the case.
Because a will must pass through probate, someone could challenge a will during the probate process. However, when a revocable living trust has been established, someone could challenge the terms through the initiation of a lawsuit.
Challenging a living trust is a bit more complicated, but it can be done.
If you hear that a trust cannot be challenged if there is a no-contest clause contained within it, this is also untrue. A no-contest clause is a clause that stipulates the disinheritance of any beneficiary who challenges the terms of the trust.
Without question, this type of clause would serve as a powerful disincentive. However, it would not legally prevent a beneficiary from filing a lawsuit.
Learn More About Living Trusts
Under certain circumstances, a living trust can be a very effective centerpiece when you are planning your estate. If you would like to learn more about them, download our special report.
The report is free, and you can visit this page to access your copy: Free Report on Living Trusts.
Joe Masiuk, Estate Planning Attorney
Latest posts by Joe Masiuk, Estate Planning Attorney (see all)
- What Is the Difference Between a General and a Limited Power of Attorney? - May 24, 2015
- What Is a QDOT Trust? - May 22, 2015
- Do You Have to Impoverish Yourself to Qualify for Medicaid? - May 19, 2015
