As with Wills, a Trust can be challenged for its validity. A trust “contest” is, strictly speaking, a legal cause of action which challenges a trust’s validity, in whole or in part (usually in part due to how common severability clauses are). Mere dissatisfaction with the manner in which a trust is written and distributes property is not in any way legal grounds for overturning the trust. There must be a legally cognizable cause of action.
Let’s have a few examples for illustrative purposes.
One of the requirements to create a valid trust is the res requirement — that is, that a trust have valid property in it at all times. This requirement is strictly construed. Upon the creation of the trust, certain property had to be contemporaneously transferred into the trust. This transfer must take place at the time of the creation. An after-the-fact transfer will not save the trust. Thus, if there is no contemporaneous transfer, then no trust was created.
Other core requirements sometimes provide fertile grounds for challenging a trust. A valid trust is created only if there is a clear intention to create the trust. If the trust is written, and such intention is not clear, then the trust may be invalid. Similarly, a trust must have a definite beneficiary. Vagueness will not suffice. There is also the requirement that the same person cannot be the sole trustee and sole beneficiary.
Although oral trusts are permissible in Missouri, a trust needs to be written in several circumstances — particularly if real estate is in the trust.
Perhaps the most common types of challenges to a trust’s validity, though, deal with capacity (see my previous post Missouri Will Contests). To create a trust a person must (1) understand the ordinary affairs of his or her life; (2) understand the nature and extent of his or her property; (3) know the persons who were the natural objects of the bounty; and (4) intelligently weight and appreciate his natural obligations to those persons and know that he or she is giving his property to the persons mentioned. Theories such as duress, undue influence, or coercion often are used in contests to state that it wasn’t the trust-maker’s free and voluntary act — and that he or she was not in his or her “right mind.”
Trusts have become more and more commonplace and complex. They have become vehicles for transferring extraordinary amounts of assets and property. Because of their importance and growing use, it’s important to speak with an attorney should you be involved with a trust in any way — be it as trustee, heir, or beneficiary.