If you want your trust to perform as intended after you’ve passed, you will need to minimize trust disputes among your beneficiaries. Disagreements over the terms of a trust can lead to expensive legal battles and destroy your asset distribution plan in the process.
But all things considered, preventing a trust dispute lawsuit is easier said than done. After all, inheritance issues can cause serious problems among family members. Beneficiaries who believe they got the short end of the stick may contest your trust to claim their share.
Fortunately, there are a few steps you can take to keep a potential trust dispute litigation at bay. Let’s explore four of them in detail.
1. Discuss Your Plans to Avoid Trust Disputes
When setting up a trust, remember that communication is vital. You should always let your beneficiaries, trustees, and other family members know of your trust plans well in advance.
Discussing the logistics and realities surrounding death is rarely enjoyable. These conversations may hit some raw nerves, which is why many people give them a hard pass. However, an estate planning or trust dispute attorney can help. They’ll be able to mediate these conversations.
In addition, here are a few tips on how to talk about trust-related matters tactfully.
- Choose the right environment. Pick a time and setting where you can speak freely without distractions.
- If you have a trustee in mind, determine if they are willing to accept the job. Discussing their roles in advance can help alleviate any shock or surprise in the future.
- Give them some time to mull things over. They should not feel pressured to agree to the role immediately.
2. Minimize Trust Dispute Litigations with a Signed Explanatory Letter
As you create your trust, you may find that you wish to justify some of your decisions. Maybe you want to express your true sentiments about a beneficiary. Or maybe, you want to leave conditions for your digital legacy. Whatever the case, it’s best if you refrain from adding personal comments in your trust deed itself. Doing so may lead to confusion, and in turn, trust disputes.
In this regard, a separate explanatory letter can help you state your personal opinions without jeopardizing your trust’s integrity. By providing some insight into your conditions, you may be able to prevent future trust disputes.
Remember that what you include in your explanatory letter is completely up to you. There are no set rules. But for legal purposes, try to hand-write it, this is one of the few times where you should. Also, don’t forget to sign the letter, so there are no questions about its origin.
3. Select a Fiduciary
Sometimes, trust disputes arise when a family member is appointed as your fiduciary, causing the others to feel neglected. To prevent this, you can consider hiring an independent fiduciary.
Fiduciary duty usually falls to a knowledgeable, neutral third party, such as an estate planning attorney, to mediate the process, reduce the risk of a trust dispute lawsuit, and ensure your assets are distributed according to your wishes.
At MHPS, not only do we help our clients select the best people to administer the trust, but we also step up as trustees when needed. Our estate planning lawyers and trust dispute attorneys can help you build a secure trust and protect your legacy effectively.
4. Update Your Trust as Necessary
Believe it or not, a trust deed is not set in stone. Many trust dispute lawyers recommend that you review your trust every three to five years. Circumstances can change quickly and you’ll want your final trust to reflect your current situation to prevent a trust dispute litigation.
As a general rule of thumb, most trust dispute lawyers recommend updating your trust when:
- You make a significant amount of money, either through sound investments, an inheritance, or selling your home/business.
- You run into financial troubles and do not have enough fortune to spare.
- Your family dynamic has changed. A marriage, divorce, or breakup will lead to changes in retirement accounts, life insurance policies, joint bank accounts, and property ownership, among other things.
- You become a parent or grandparent. Ideally, you should name a guardian to take care of your minor children if you pass away prematurely.
- You lose a spouse or loved one. Emotional devastation aside, the death of a loved one can have a dramatic impact on your trust. You may have to choose a new trustee, beneficiary, or guardian, based on the circumstances.
- You need long-term medical attention after a life-altering accident. With healthcare costs rising rapidly, you should ensure your trust can pay your bills.
Talk to a Reputable Trust Dispute Attorney Today
There’s no denying that trust disputes can fracture your family for good. However, you can use these tips to avoid them altogether. Additionally, it’s important to have experienced trust dispute attorneys helping you handle your trust. At MHPS, we will help your family members understand their rights and navigate a potential dispute as necessary.
If you have questions about trust dispute lawsuits, do not hesitate to contact our team. Our experienced trust dispute lawyers will ensure your interests are protected. For more information, contact us today.