Trust and Will litigation is a bit of a shell game. You remember the shell game, where a pea is placed under one of three shells and then the shells are re-sorted as quickly as possible so as to lose track of which shell has the pea. The observer is then asked to pick the shell with the pea—it’s a 1 in 3 shot of getting it right.
The reason Trust and Will litigation is like a shell game is because so much depends on how assets are titled at death (see our earlier blog post on this issue). The Trusts and Wills are the shells and the assets are the peas.
For example, a decedent may die with a Trust, but if nothing is titled in the name of the Trust, then there may be nothing to contest regarding the Trust.
And a Will only controls what is in the estate, which means only those assets titled in the decedent’s name alone (this excludes property titled in joint tenancy, by beneficiary designation, or in the name of a trust). However, in most cases, people have “pour-over” Wills that pass all assets from their estate to their Trust. Thus, a Trust may not have any assets to begin with, but can obtain assets from a pour-over Will.
Sound confusing? It is. So where do you start when you want to contest a Trust and a Will (or is it a Trust or a Will, or just a Trust, or maybe just the Will…)?
Step One. You have to determine where the assets are located. Often, they are scattered all over the place, with some in a Trust, some in the decedent’s own name (so those are in the probate estate), and some passing by joint tenancy with right of survivorship (which pass outside the Will and the Trust).
Step Two. Once you have identified where the assets are located, you need to know what documents you are working with. Is there a Trust, what does it say, and when was it last amended? Is there a Will, what does it say? What about joint tenancy property?
Step Three. You have to decide what to attack first. Typically that would be the vehicle that has the assets. So if the assets are in the Trust, contest the Trust. If the assets are in the probate estate, contest the Will. (You’ll have to open probate to contest a Will, if probate is not already opened.) If the assets are in joint tenancy, you have to file that lawsuit in the probate estate (see Probate Code Section 5302), but it will take clear and convincing evidence to dislodge the joint tenancy. Sometimes, you will want to attack all three at the same time if there is a chance that assets may pass from one vehicle to another (such as from a pour-over Will to a Trust). Other times, you will attack just one and save the other contests for later if the need arises.
The mistake you want to avoid is attacking a vehicle that has no assets and never will have any assets. So if an asset is passing by joint tenancy (which passes outside a Will and a Trust) and you want to attack that transfer (i.e. the joint tenancy transfer, such as a jointly held bank account), then you have to file a lawsuit in the probate estate and request that the joint tenancy asset be returned to the estate. If you are successful, then (and only then) the asset would pass by Will, if the Decedent had a Will, or by intestate succession if there is no Will. You most likely do NOT want to contest the Decedent’s Trust in this scenario because the Trust does not own the joint tenancy asset. In fact, the Trust has nothing to do with joint tenancy assets in most cases.
The bottom line is to map out the location of the assets and the documents you are contesting. Of course, there has to be a reasonable legal basis for the contest and you have to watch out for any no-contest clauses (see our earlier posts on no-contest clauses). But once the facts are mapped out, you can then plan your attack on the document that holds the asset(s).