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Monday, October 31, 2016

What attorneys don’t tell you about revocable trusts - That They Can Be Contested and Probated!

Nearly all of the states have adopted elements of the Uniform Probate Code in their own probate code so...

After the death of the settlor of a revocable trust, the trust may be contested on grounds similar to those available to a will contestant. Generally, contest grounds in an action to invalidate a revocable trust following the settlor’s death will be applied in the same manner as in contests of wills.

Two recent cases involving revocable trusts directly address standing. In the first, from New York, the issue was whether an heir of a deceased settlor of a revocable trust could contest the trust as well as the settlor’s pour over will that devised her estate to the trust. Allowing the disinherited heir to proceed, the court emphasized the testamentary nature of the revocable trust:

[R] trusts – used increasingly as devices to avert will contests – function essentially as testamentary instruments (i.e., they are ambulatory during the settlor's lifetime, speak at death to determine the disposition of the settlor's property, may be amended or revoked without court intervention and are unilateral in nature) and therefore must be treated as the equivalents of wills in the eyes of the law…[T]he rights and remedies of the parties interested in a revocable trust must be consistent with the rights and remedies of the parties interested in a decedent's will… Thus, a distributee who is entitled to file objections to probate should also be accorded standing to commence an action to set aside a revocable trust, since the latter is but another part of the decedent's testamentary plan.

University of Akron School of Law/Alan Newman

What else doesn’t your attorney tell you, that there are nonprobate instruments that transfer property on the death of a donor - non-testamentary transfers that are not subjected to Will act formalities or probate-Promissory notes.

Check our event schedule to learn more about leveraging your assets to avoid the Probate nightmare.

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