Trusts can be an effective way to bequeath property and assets to loved ones while avoiding the stress and cost of the public probate process. However, there may be instances where a trust might be challenged in court. If you are considering contesting a trust in Illinois, it’s essential to understand that there are certain criteria that must be met. In addition, if the trust contains a no-contest clause, it’s critical to carefully consider whether it is in your best interests to challenge the instrument before doing so.

Here are five things you should know about challenging a trust in Illinois:

1. You Must Have Legal Standing To Challenge a Trust

To challenge a trust, you must have legal standing. This means you have a financial interest in the outcome of the court’s decision regarding the matter. Typically, an individual with standing will fall into one of two categories — they must either be a trust beneficiary or an heir of the decedent. Beneficiaries are those who are specifically named in the instrument. An heir is someone who would be legally entitled to inherit property from the decedent, absent a valid will or trust.

2. You Must Have Valid Grounds To Challenge a Trust

If you are the beneficiary of a trust or an heir with legal standing who is considering challenging a trust, it’s advisable to speak with an attorney. Litico Law’s Trust Litigation Attorney provides high-quality representation throughout Illinois for trust contests and trust litigation matters. Contact us today to discuss your situation.

Even if you have the legal standing necessary to contest a trust, you cannot simply challenge the instrument because you are unhappy with its terms. You must show that there is a specific legal ground upon which the trust may be deemed invalid. For instance, you must prove one of the following:

• Unsound mind — A trust settlor must have been of sound mind at the time the trust was executed and had the mental capacity to understand what they were signing.
• Undue influence — A trust must be executed at the settlor’s own free will. If someone unduly influenced them at the time that the trust was signed, it may be invalid.
• Fraud — If you can show that the settlor was deceived into executing the trust, the instrument may be rendered invalid.
• Failure to follow legal formalities — The proper legal requirements were not followed when executing the trust for it to be valid.
• Revocation — If the trust had been revoked by destruction or execution of a new instrument, grounds may exist to contest the trust.

To demonstrate one of the above legal grounds in order to invalidate a trust, you must be able to present adequate evidence. A judge will consider witness statements concerning the settlor’s mental state and any other relevant evidence that supports your position.

3. You Have a Limited Amount of Time to Challenge a Trust

When it comes to contesting a trust in Illinois, you only have a limited amount of time to do so. By law, you must commence a proceeding to contest the validity of the trust within two years of the settlor’s passing or six months from the date the trustee sends notice to the trust beneficiaries — whichever comes first. Failure to challenge a trust before the applicable statute of limitations expires can result in your being barred from bringing an action.

4. No-Contest Clauses Are Enforceable in Illinois

It’s important to be aware whether the trust you are seeking to challenge contains a no-contest clause. These types of clauses mean that if a beneficiary brings an action in court to challenge the trust, they would ultimately forfeit their inheritance — or a large portion of it — if the contest was unsuccessful. A settlor may use this type of clause to discourage beneficiaries from contesting a trust so that their wishes can be carried out in the way in which they had intended. But in the event fraud was discovered in connection with the execution of the trust, a no-contest clause may be deemed inapplicable and unenforceable.

5. A Trust Contest May Involve a Trial

One of the benefits of creating a trust is that they generally avoid court and public probate proceedings. However, when a trust is contested, it must go through the court process. Contesting a trust may involve lengthy and costly judicial proceedings — and a trial if the matter does not settle. The legal proceedings for challenging a trust are commenced by filing a petition with the probate court in the applicable county that states facts which would invalidate the trust if established.

Contact an Experienced Illinois Trust Litigation Attorney

If you are the beneficiary of a trust or an heir with legal standing who is considering raising a challenge to the trust instrument, it’s crucial to consult with a skillful attorney. A knowledgeable trust litigation attorney can best evaluate the facts of your situation and determine whether it is in your best interests to pursue litigation. Located in Rolling Meadows, Litico Law Group provides high-quality representation throughout Illinois for trust contests and trust litigation matters. We welcome you to contact us by filling out our online form or call (847) 307-5942 to schedule a consultation to learn how we can assist you.

A trust can be a powerful tool to safeguard a settlor’s assets and reduce tax consequences for their loved ones. While these instruments can ensure the settlor’s property is protected and their wishes are met, it’s important to understand that there are some instances where these documents might be challenged. Significantly, if a settlor lacked capacity or was unduly influenced at the time the trust instrument was signed, a beneficiary or legal heir may be able to contest it. In the event it can be proven that the creation of the trust was procured by undue influence or in connection with the settlor’s lack of capacity, the instrument will be deemed void.

When Can You Challenge a Trust?

If you are the beneficiary of a trust and discover your inheritance has suddenly decreased or a new beneficiary appeared in the instrument, you might consider contesting it. However, you cannot contest a trust simply because you are unhappy with what was written in the document. You must be able to establish that grounds exist to render all or part of the trust invalid. Grounds upon which a trust can be challenged can include lack of capacity, unsound mind, undue influence, fraud, or improper construction of the instrument.

In addition, not just anyone can challenge a trust — you must have the legal standing to do so. This means you have an interest in the outcome of the court’s determination. In other words, you must be able to show that you are a beneficiary with a financial interest in the trust. A legal heir who would have inherited a portion of the settlor’s estate under Illinois intestacy laws may also be able to assert legal standing.

What is Lack of Capacity When Challenging a Trust?

Grounds upon which a trust can be challenged can include lack of capacity, unsound mind, undue influence, fraud, or improper construction of the instrument. If you are challenging a trust, it’s crucial to speak with a skillful attorney who can guide you through the legal process.

Lack of capacity is one of the most common grounds upon which a trust can be challenged. These grounds for a trust contest can arise when the settlor did not have the legal capacity to execute the trust instrument. For instance, they may have had a certain medical condition, such as dementia, that made them incapable of understanding the consequences of signing the document. If the person executing the instrument could not understand the terms of the trust, the extent of their property, or their relationship to the beneficiaries, the grounds for challenging a trust for lack of capacity may exist.

To prove the settlor lacked the capacity to execute a valid trust, medical evidence must be presented to the court. This can show the settlor’s medical condition and state of mind at the time the document was signed. Additional evidence can also be helpful to establish that the document does not reflect the settlor’s true intent.

What Does Undue Influence Mean When Challenging a Trust?

Not to be confused with lack of capacity, undue influence refers to situations in which a party took advantage of a settlor’s vulnerability. To challenge a trust based on undue influence, it must be shown that the settlor’s age, health condition, dependency, cognitive abilities, or isolation made them vulnerable. Under Illinois law, there is a presumption of undue influence if the challenger of a trust can establish the following four elements:

• The existence of a fiduciary relationship between the settlor and a person who receives the benefit of the instrument;
• The settlor was in a dependent situation while the beneficiary had a dominant role;
• The settlor placed trust and confidence in said beneficiary; and
• The beneficiary participated in the procuring and execution of the instrument.

Undue influence can include actions or tactics such as controlling the settlor’s medication or interactions with loved ones. It can also involve the use of intimidation or coercion. Notably, under the Illinois Probate Act, any property transfer to a non-relative caregiver in an amount more than $20,000 is considered fraudulent if challenged. In such cases, the burden would be placed on the caregiver to prove that there was no undue influence exerted upon the settlor.

What Happens if a Trust Contest is Successful?

The legal process for challenging a trust is similar to contesting a will. A petition must be served upon the adverse party and any other parties interested in the outcome of the proceeding. Following the pleadings, the discovery phase of litigation begins — this is where evidence, information, and documentation is exchanged by both sides, giving the parties an opportunity to investigate the facts of the case. If the case does not settle, it will proceed to trial.

If a trust contest is successful, the instrument will be declared invalid. This makes it as if a trust were never created at all — and the outcome may be entirely different than it would have been if the trust remained in place. In such cases, the property and assets contained in the trust may be administered in accordance with Illinois intestate law. The individuals who would inherit under Illinois intestacy law depend upon which family members are living upon the decedent’s passing.

Contact an Experienced Illinois Trust Litigation Attorney

Challenging a trust can be complex, emotionally overwhelming, and stressful. If you are facing a trust dispute, it’s crucial to have a skillful attorney by your side who can guide you through the legal process. Located in Rolling Meadows, Litico Law Group provides reliable representation throughout Illinois for trust litigation matters. We welcome you to contact us by filling out our online form or call (847) 307-5942 to schedule a consultation to learn how we can assist you.

Trusts are often used in estate planning to provide a number of benefits — including protecting assets from creditors and transferring wealth to the next generation. A trustee has considerable authority over how the assets in a trust are managed and owe a fiduciary duty to the beneficiaries. Unfortunately, not every trustee adheres to these duties. When a trust is mismanaged and a breach of trust is committed, a beneficiary may be entitled to sue for their damages.

What Is a Trust?

A trust is an estate planning tool that allows a third-party to hold property on behalf of a beneficiary who is selected by the individual who creates the trust. There are many different types of trusts that can be used, depending on the creator’s objectives. For example, they might be used to avoid probate, preserve assets, or reduce estate taxes.

Trusts fall into one of two categories — they may be revocable or irrevocable. When a trust is revocable, it can be changed at any time during the creator’s lifetime. An irrevocable trust cannot be changed at any time.

Can a Beneficiary Sue a Trustee?

When a trust is mismanaged and a breach of trust is committed, a beneficiary may be entitled to sue for their damages. If a trustee committed a breach of trust, it may be necessary to commence litigation to recover your damages.

If you are the beneficiary of a trust and suspect wrongdoing on the part of the trustee, you might be wondering, “can a beneficiary sue a trustee?”

Under Illinois law, a trustee has various duties and responsibilities when it comes to managing and controlling the assets in a trust. In addition to administering the trust assets in accordance with the instructions provided by the grantor, they must uphold the fiduciary duty that is owed to the trust and its beneficiaries. This means acting in the best interests of the beneficiaries, avoiding conflicts of interest, and not taking actions that would result in a personal benefit to them. A trustee must also invest assets in such a way that maintains or increases their value, and distribute them in a timely manner.

Failure to carefully and honestly carry out the duties required of them can result in a trustee being sued by a beneficiary. A lawsuit may be brought against a trustee under a variety of circumstances, including those involving:

• Misappropriation of trust assets
• Failure to provide annual accountings
• Wrongfully withholding assets from the beneficiaries
• Fraud and misrepresentation
• Failure to take reasonable steps to preserve the trust assets
• Commingling the assets in the trust
• Failure to disclose relevant information regarding the trust
• Mishandling trust property
• Delaying distribution of assets

Critically, the above misconduct can result in significant financial harm to a beneficiary. A violation of a trustee’s fiduciary duties can also lead to loss of assets that the grantor wished them to have — and constitute a breach of trust. In these cases, a beneficiary may be able to pursue a legal remedy in court.

What Are the Remedies for a Breach of Trust?

The Illinois Trust Code sets forth a variety of remedies in breach of trust cases. For instance, the court may compel the trustee to perform their duties or impose an injunction to stop the trustee from continuing their wrongful actions. They might also compel the trustee to redress a breach of trust by paying money, restoring property, or taking other action. Depending on the circumstances, a court might deem it appropriate to appoint a special fiduciary who will take possession of the trust and administer it.

Pursuant to Illinois law, a court has the broad authority to order equitable relief in a breach of trust case. Other remedies a judge might issue can include the suspension or removal of a trustee. Additionally, a court can deny the trustee the compensation they might otherwise have been entitled — or impose a constructive trust on the property in the trust. A court can also render an act by the trustee void or trace trust property wrongfully disposed of and recover the proceeds.

What Damages Can a Beneficiary Sue a Trustee For?

A trustee who committed a breach of trust can be held liable to the beneficiaries for their damages. If a breach of trust has been determined, Illinois law allows a beneficiary to receive the amount required to restore the value of the trust assets had the breach not occurred or the amount the trustee received due to the breach — whichever is greater.

Absent a breach of trust, a trustee is not legally liable to a beneficiary for any depreciation in the value of the trust property. They also cannot be held accountable for a breach for any benefit they received by reason of administration of the trust. In other words, a trustee cannot be held liable if the trust does not make a profit. They can only be held liable for loss of trust assets in instances of bad faith and wrongdoing, such as those listed above.

Contact an Experienced Trust Litigation Attorney

If a trustee committed a breach of trust, it may be necessary to commence litigation to recover your damages. Located in Rolling Meadows, the trust litigation attorneys at Litico Law Group serve the legal needs of trust beneficiaries and trustees for a wide variety of legal issues in Illinois. We welcome you to contact us at (847) 307-5942 to schedule a consultation to learn how we can help.

There are many benefits to setting up a trust, and a wide variety of trusts can be created, depending on your objectives. These legal instruments fall into two primary categories — trusts can be either revocable or irrevocable. Although both types of trusts share some common attributes, there are several key differences. Whether you’re considering a trust as part of your estate plan, to manage investments, or protect your assets from creditors, it’s important to know the difference between revocable and irrevocable trusts.

What Is a Trust?

A trust is a legal arrangement that allows a third party to hold assets or property on behalf of a beneficiary. Property is transferred into the trust by the creator — known as the “trustor” — and the assets are retitled in the name of the trust. A party referred to as the trustee acts as the custodian for the trust. The trustee is responsible for managing the assets in the trust and administers the trust to the beneficiaries in accordance with the terms of the instrument.

How Are Revocable and Irrevocable Trusts Different?

Whether you’re considering a trust as part of your estate plan, to manage investments, or protect your assets from creditors, it’s important to know the difference between revocable and irrevocable trusts. If you are facing a trust dispute, it’s essential to have knowledgeable legal counsel by your side who can safeguard your interests. We welcome you to schedule a consultation to learn how we can assist you.

Each type of trusts holds assets and property on behalf of a beneficiary — but there is one key difference between revocable and irrevocable trusts. While the terms of a revocable trust can be modified at any time, an irrevocable trust usually cannot be changed or amended. Notably, each type of trust comes with its own pros and cons based on the creator’s intentions. Even though both revocable and irrevocable trusts can avoid the lengthy and costly probate process, only irrevocable trusts come with estate tax advantages.

What Is an Irrevocable Trust Used For?

Irrevocable trusts come in two different forms — living trusts and testamentary trusts. A living trust, which is also referred to as an inter vivos trust, is created and funded by the trustor during their lifetime. These types of trusts can include irrevocable life insurance trusts, grantor-retained annuity trusts, lifetime gifting trusts, and charitable remainder trusts. In contrast, a testamentary trust is established after the creator’s passing and is funded in accordance with the terms of their will.

While an irrevocable trust may be created for several different reasons, they are often used to help with the following:

• Avoiding probate — Placing your assets in a trust can ensure your loved ones avoid the probate process when you pass away.
• Maintaining privacy — Since an irrevocable trust does not go through the public probate process, you can keep your financial affairs private.
• Protecting assets from creditors — With an irrevocable trust, the asset is no longer owned by the trustor, making it more difficult for creditors to reach them.
• Long-term care planning — An irrevocable trust is often used in connection with Medicaid planning to ensure your remaining assets are transferred to your loved ones in accordance with your wishes.
• Estate tax planning — Irrevocable trusts are often used as part of a comprehensive estate plan to minimize the impact of estate taxes.

It’s crucial to be aware of the disadvantages that can come with setting up an irrevocable trust. Not only is the grantor required to relinquish control of their assets, but an irrevocable trust has no flexibility — you would not be able to access the funds in the trust even if you needed them for a specific purpose.

What Is the Purpose of a Revocable Trust?

Revocable trusts are a critical component of estate planning and there are virtually no downsides to establishing this type of arrangement. While these trusts often serve many of the same objectives as a will, they can also be used to avoid probate when you pass away. Unlike an irrevocable trust, a revocable trust can be modified, amended, or revoked at any time upon the wishes of the trustor.

With a revocable trust, the trustor can designate themselves as both the trustee and beneficiary of the trust. There is no difference between the trustor owning assets in their own name — versus in the name of the trust. Upon the trustor’s passing, a revocable trust automatically converts to an irrevocable trust. Since this type of trust is effective during the trustor’s lifetime, it can help to manage their assets and property in the event of incapacitation, illness, or disability.

Common Scenarios Leading to Trust Litigation

Whether you’re the beneficiary of a revocable or irrevocable trust, there can be many reasons disputes arise. One of the most common reasons for trust litigation stems from a trustee’s mismanagement, wrongdoing, or breach of fiduciary duty. If a trust has multiple trustees, there may be disagreements among them about what is in the best interests of the trust. It’s also not uncommon for conflicts to arise between beneficiaries and trustees in connection with the distribution, investment, or control of trust assets.

In addition to bringing a legal claim in connection with how the trust is being managed, the trust itself can be challenged if it was created under duress, by coercion, or at the time the trustor was incapacitated. Other grounds upon which a trust instrument might be contested can include allegations of fraud, ambiguous trust terms, and misappropriation of the assets. Although some trust disputes may be resolved using an alternative dispute resolution method such as mediation, these cases can be extremely contentious and require the need for litigation in the courtroom.

Contact an Experienced Illinois Trust Litigation Attorney

If you are facing a trust dispute, it’s essential to have knowledgeable legal counsel by your side who can safeguard your interests. Located in Rolling Meadows, Litico Law Group is dedicated to serving the needs of trustees and trust beneficiaries in Illinois and protecting their rights in litigation. We welcome you to contact us by filling out our online form or calling (847) 307-5942 to schedule a consultation to learn how we can assist you.

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