Can You Challenge a Trust in Utah Without Losing Your Distribution Rights?

One of the prime reasons people create an estate plan is to minimize the likelihood of family conflict over the distribution of assets. However even the most carefully drafted trusts and wills might get challenged if a beneficiary believes that they were shortchanged. People who want to discourage loved ones from challenging their estate planning instruments sometimes include a no-contest clause. This provision bars beneficiaries from receiving any assets under the trust or will if they contest the document’s validity.

States take various approaches when trying to balance the stated wishes of a trust settlor and the need to review potential problems. In Utah, a no-contest clause is only enforced if the beneficiary lodging the challenge lacks a good reason to do so. If you are contesting a trust in good faith and have evidence to back up your position, you should not have to forfeit your rights as a beneficiary even if you seek to disqualify the document for one of the following reasons:

• Undue influence — A court might find undue influence when evidence shows that trust terms were the result of pressure exerted by a third party, rather than the settlor’s free will.
• Lack of mental capacity — Beneficiaries might claim that a trust settlor lacked requisite mental capacity when drafting the document. However, mere forgetfulness is not enough to undo an otherwise valid document.
• Fraud or forgery — Someone unhappy with the distribution they received could assert that the settlor’s signature or the asset distribution instructions were falsified or fraudulently induced.
• Breach of fiduciary duty — Certain challenges don’t involve problems with the trust itself, but assertions of financial abuse or mismanagement committed by a trustee.

Someone might be especially inclined to draft a no-contest clause when they are in a blended family or when they have chosen to give different amounts to siblings. When determining whether a no-contest clause will be enforced, Utah courts look at whether a reasonable person, looking at the facts, would have believed there was a genuine likelihood of success. Solid documentation and credible evidence will protect you against losing what was left to you, even if your challenge eventually fails.

Consulting with an experienced trust and estate litigation attorney can help you understand if probable cause exists to challenge an estate planning document.

Since 1957, the attorneys of Jeffs & Jeffs, P.C., have delivered steadfast, honest advice and advocacy to Utah residents. Located in Provo, we proudly assist clients with complex trust and estate matters. Please call 801-373-8848 or contact us online to schedule a consultation.