Who Can Contest a Trust in Michigan?

Trusts, especially revocable living trusts, have become an increasingly popular estate planning tool in recent years, and for good reason. Trusts avoid the probate process, they give the creator (grantor) flexibility and control, and they allow for seamless administration by a successor trustee after the grantor’s death. 

One lesser-known advantage of trusts is that, generally speaking, they are more difficult to challenge than a will. Because living trusts have often been in effect without issue for years before the grantor dies, it can be harder to dispute their validity at that point. 

Another factor making will contests more common than trust contests is that people are more likely to do a “DIY” will, with the result that the will may not meet legal requirements for a valid will. Trusts are somewhat more complex, and people who want a valid trust are more likely to seek an attorney’s help. 

But while trusts may be more difficult to challenge than a will, trust contests do still happen, and they can be successful. Who can contest a trust in Michigan, and how? 

Understanding Who Can Contest a Trust

You may have heard the term “standing” when it comes to filing a legal claim or lawsuit. Without standing, a claim, such as a challenge to a trust, must be dismissed by a court. In general, for someone to have legal standing, they have to be directly affected by the decision. 

The following are parties who can contest a trust in Michigan:

Heirs at Law

“Heirs at law” is a legal term that refers to the individuals who would have been eligible to inherit from the grantor of the trust under Michigan law had he or she died without a will or trust. Usually that is a spouse or children, but if the deceased had no spouse or descendants, heirs at law could be parents or siblings. 

Current Trust Beneficiaries

A beneficiary is someone who is designated to receive assets or benefits under a trust. With a living trust, the grantor is usually the trust beneficiary during their lifetime; after their death, they designate successor beneficiaries. Individuals (or entities, such as a charity) who are named as beneficiaries under the current trust are also among those who can contest a trust, even if they would not otherwise be heirs at law. 

Beneficiaries of Prior Versions of a Trust

If the grantor has revised or updated an existing trust to exclude beneficiaries named in prior versions of the trust, those excluded beneficiaries have standing to contest the trust. For instance, let’s say Uncle Albert created a trust with his nephews Bob, Charles, and Daniel as beneficiaries. If he then revised the trust to exclude Daniel and add nephew Edward as a beneficiary, Daniel would have standing to contest the revised trust, even though he was not named as a beneficiary in it.

Standing is important; otherwise, anyone could try to challenge a trust, even if all those directly affected by the trust considered it valid and fair. But even if you are one of the people who can contest a trust because you have standing, you cannot challenge the trust simply because you don’t like the terms. There must be a legal reason that the trust is not valid.

When Can Someone Contest a Trust in Michigan?

There must be specific legal grounds to contest a trust in Michigan. These are the same as the grounds for contesting a will: 

• Lack of capacity: the grantor lacked the mental ability to understand the nature and extent of their assets, their beneficiaries, or the consequences of the trust.
• Undue influence: someone, such as a caregiver, friend, or relative, manipulated or pressured the grantor into making or changing the trust in their favor.
• Fraud: someone tricked the grantor into executing the trust, perhaps by persuading them that they were signing a different document.
• Forgery: someone forged the grantor’s signature on the trust document.
• Duress: the grantor executed the trust because of force or threat of harm.
• Improper execution: there was some legal defect in the execution of the trust, such as that it lacked all required signatures.
• Illegal purpose or violation of public policy: a trust cannot require someone to do something illegal in order to receive benefits under the trust.

If the trust is successfully challenged for one of the reasons above, it may be declared invalid. If there was a previous valid trust, the prior trust may be reinstated. If there was no previous trust, and no other estate plan in place, the assets in the trust may be distributed according to Michigan laws of intestate succession. 

If the trust is otherwise valid, but there were provisions included due to undue influence, fraud, or duress, or that were against public policy, the court might decide to keep the trust intact, but remove or modify the invalid provision.

Preventing Michigan Trust Contests

If you are making a trust, the best way to prevent your heirs or beneficiaries from contesting the trust in the future is to work with an experienced Michigan estate planning attorney. An attorney will make sure your trust contains only legal provisions and is properly drafted and executed. An attorney can also include a “no contest” clause to discourage challenges to your trust. While these clauses are most commonly associated with wills, they may also be included in a trust. 

Legal Help for Michigan Trust Contests

If you need help challenging a Michigan trust, or are a beneficiary or trustee of a trust that is being contested, it’s important to have sound legal advice. To learn more about who can contest a trust in Michigan or to seek help with your situation, contact Estate Planning &Elder Law Services to schedule a consultation.