What You Should Know About the Trust Litigation Process in Las Vegas, Nevada

When you create a trust, it’s your desire that the assets inside the trust are distributed according to your wishes to your named beneficiaries. Unfortunately, many situations can arise over time that can make the process of administering your trust a problem and increase the likelihood for trust litigation. Below, we will further elaborate on the trust litigation process in Nevada.

What is Trust Litigation?

To begin with, a trust litigation process occurs when a person or entity steps forward to challenge the validity of your trust.
There are numerous factors why litigation arises including poorly executed documents, breaches of fiduciary duties, estate administration issues, incorrect distribution of assets, questions over undue influence, competency claims, or family members who are upset they were not made beneficiaries.

One Main Reason your Trust May be Litigated

Unfortunately, many downloaded documents from the internet or even estate planning documents purchased at form stores can account for trust litigation. The laws of each state are very specific and relying on a do-it-yourself-will or trust document can create an opportunity for trust litigation. It’s also very important that you routinely review your documents to make sure they are up to date. If you create a trust and name your brother and sister as trustee and alternate trustee and they are both deceased, your trust has the opportunity to end up with a relative who may not execute your trust documents as required.

Additional Reasons for Trust Litigation

Another reason your trust may be litigated is due to capacity issues. It’s generally best that if you are over age 70 and are going to make changes to your trust that you obtain some type of documentation that shows you have capacity. While it is not necessary, doing so can greatly strengthen your case should your trust be litigated. In addition, issues of undue influence may arise. For example, if your loved one is 74 and has had a trust in place for 15 years and then suddenly he or she decides to change their trust and leave ½ of their estate to a caregiver, there could be a claim of undue influence.

Assets Not in Your Trust

Many times trust is correctly executed but the assets, such as real estate, are never properly titled in the name of the trust. When this occurs, it can create confusion for the beneficiaries and increase the opportunity for trust litigation. Periodically you should ensure your assets are properly titled in the name of the trust, especially after you inherit property, marry, divorce or have a property refinanced.

Common Types of Trust Litigation Matters

The purpose of a will or trust is to make the distribution of assets a smooth process but it is always subject to trust litigation brought upon my dissatisfied family members and beneficiaries. Below are several common reasons for trust litigation:

Disinheriting children

When a trust or will disinherits a child, there is specific language that can make it clear that this was what the decedent intended. When a child is simply omitted from the trust, this can create confusion so working with an experienced trust attorney can limit the liability and likelihood for trust litigation. These decisions are never easy, but many times they are decided out of love. If the child is suffering with a drug addiction, certainly inheriting a large sum of money will not be in the best interest of the child. Some parents decide to create a special needs trust, allowing the child to have access to funds for medical care while others decide to omit the child entirely from the trust or will.

Trust Amendments

Any changes to a trust or will must be clearly defined. It should be clear what provisions are being altered and ensure the trust documents are not ambiguous. It’s important for an experienced estate planning attorney to thoroughly read the entire document, if the provisions in paragraph 1.C conflict with the provisions in paragraph 4.D there can arise disputes and increase the likelihood for litigation.

Mental incapacity

To limit the likelihood for trust litigation, the person creating the will or trust should be mentally stable and aware. When changes are made just before someone dies, it’s important to verify that the person had capacity. Capacity is usually determined by a medical doctor or a neurologist if possible.

Invalid Execution

A will or trust should be properly written, signed, notarized, and witnessed in accordance with Nevada state law. If not, the document is likely to be challenged or determined to be invalid. Sadly, many of these cases occur with do-it-yourself-wills or trusts that fail to comply with Nevada law.

Creditors

Before distributions occur to the beneficiaries, creditors should be notified with proper notice. If a decedent’s estate is distributed without payment to the creditors, the creditors can file in court to recover its losses.

Breach of Fiduciary Duty

Trustees and executors are required to distribute the assets without mishandling the administration of a will or trust. If the trustee fails to comply with the trust, the beneficiaries may decide to pursue trust litigation.

Undue influence

This is an unfortunate circumstance when a descendant makes changes to their trust under pressure or manipulation of a family member or friend.

Divorces and Second Marriages

Trust litigation is also more likely if the decedent is in the process of divorce. There have been instances where the decedent has signed the divorce decree, but the decree has not been filed with the court. The matter must first be decided in divorce court before being probated or litigated. Sometimes a decedent is divorced, but failed to update their beneficiary status. Making sure your beneficiaries are updated and your estate planning documents are reviewed after a divorce is important.
Likewise, if the decedent is remarried and has children from a prior marriage, it’s important that the trust clearly lists which assets are to be distributed to each party. Our firm has been retained by both spouses and children to advocate for their interest when the trust documents are unclear.

Claims Brought by Trustees in Nevada

Trustees have the right to reimburse the costs that they have spent throughout the trust litigation process in Las Vegas. These claims should meet the criteria of “properly incurred.”

Actions Taken Against a Trustee

A fiduciary duty should be executed by trustees; he or she should take care of the trust assets with honesty and integrity. In cases where a trustee commits fraud or hides assets, they can be found personally liable.
An experienced trust litigation attorney can limit your liability and decrease the likelihood for expensive Nevada litigation. You’ve worked hard to accumulate your assets. Hiring a competent estate planning attorney can assist you in making sure your desired loved ones inherit your assets with less stress. When trust litigation cannot be avoided, contact an experienced trust attorney as soon as possible to help you with the process.

For more than 30 years, Attorney Lee A. Drizin has practiced in the areas of estate planning, probate, trusts, guardianship and real estate matters representing clients throughout the state of Nevada.

Drizin Law is providing this information for educational purposes only. It should not be construed as legal advice or a legal opinion as to any specific facts or circumstances. This information is based on general principles of Nevada law at the time it was created and you should be aware laws frequently change. Moreover, the laws affecting you may differ depending on the circumstances. You should consult with a qualified attorney in your own state or jurisdiction concerning your particular situation. Review of this information does not create an attorney-client relationship.