A special needs trust (SNT), designed to provide for individuals with disabilities without disqualifying them from crucial government benefits like Medi-Cal and Supplemental Security Income (SSI), can indeed be contested, though successful challenges are not always common.
What are the Common Grounds for Contesting a Special Needs Trust?
Several grounds could lead to a legal challenge to a special needs trust; these typically fall into categories like undue influence, lack of capacity, improper funding, or breaches of fiduciary duty. Roughly 20-30% of estate plans face some form of challenge, and while SNTs aren’t immune, their specific structure can often offer strong defenses. Undue influence occurs when someone exerts control over the grantor (the person creating the trust), forcing them to create a trust that doesn’t reflect their true wishes. Lack of capacity means the grantor didn’t have the mental competence to understand the trust’s terms when they signed it. Improper funding refers to assets being transferred into the trust incorrectly or fraudulently, and breaches of fiduciary duty involve the trustee mismanaging the trust assets or acting in their own self-interest instead of the beneficiary’s. A well-drafted trust, created with the assistance of an experienced attorney like Steve Bliss, significantly reduces these risks.
How Does the Trustee’s Role Impact Potential Disputes?
The trustee’s actions are central to any potential contest. Trustees have a legal duty to act prudently, impartially, and in the best interests of the beneficiary. If a beneficiary or other interested party suspects the trustee is violating these duties—perhaps by making risky investments, favoring one beneficiary over another (if multiple exist), or failing to provide required accountings—they can petition the court for intervention. According to a recent study by the National Academy of Elder Law Attorneys, approximately 15% of trust disputes involve allegations of trustee misconduct. A clear and detailed trust document, coupled with meticulous record-keeping by the trustee, are vital defenses against such claims. Steve Bliss emphasizes that proactive communication between the trustee and the beneficiary (or their advocate) can often preemptively resolve issues before they escalate into legal battles.
I Remember Old Man Hemlock…
Old Man Hemlock was a bit of a recluse, and his daughter, Bethany, hadn’t spoken to him in years. When he passed, he left everything to a special needs trust for his grandson, Leo, who had significant developmental disabilities. Bethany, resentful of her strained relationship with her father, immediately contested the trust, claiming he lacked the capacity to create it. She presented evidence of his declining health in the months leading up to his death, attempting to paint a picture of someone unable to make sound financial decisions. The court, however, uncovered that Old Man Hemlock had met with Steve Bliss several times, and the attorney’s detailed notes and video recordings demonstrated that he was fully aware of his actions and their implications, and was of sound mind when he created the trust. Bethany’s challenge failed, but it caused significant delays and legal fees, needlessly adding stress to an already difficult time for Leo and his caregivers.
What Happens When a Trust is Successfully Contested?
If a court finds a special needs trust invalid, the consequences can vary greatly. The trust might be revoked entirely, with assets distributed according to the grantor’s will or the state’s intestacy laws (if there’s no will). Alternatively, the court could modify the trust terms to correct the specific issue that led to the challenge. However, this can be complex, particularly if it involves altering provisions to maintain the trust’s eligibility for government benefits. In some cases, the court might order the trustee to account for any losses resulting from their misconduct. Roughly 40% of successfully contested trusts result in a complete revocation of the trust, highlighting the importance of proper planning and legal counsel. The financial and emotional toll of a legal battle can be substantial, which is why preventive measures are so crucial.
Then There Was Mrs. Gable…
Mrs. Gable was incredibly meticulous. She planned for years to ensure her son, David, who had Down syndrome, would be well cared for after she was gone. She worked closely with Steve Bliss to create a comprehensive special needs trust, clearly outlining how assets should be managed and distributed. When she passed away, a distant relative, fueled by greed, attempted to challenge the trust, alleging undue influence. However, Mrs. Gable had been exceptionally diligent in documenting her intentions, keeping detailed notes of her meetings with Steve Bliss, and even recording several videos explaining her wishes. She also regularly communicated with David and his caregivers about the trust, ensuring everyone understood its purpose. Because of her foresight and the thoroughness of her planning, the relative’s challenge was quickly dismissed, and David continued to receive the support his mother had so lovingly planned for him. It was a testament to the power of careful estate planning and the importance of working with a knowledgeable attorney.
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About Steve Bliss at Escondido Probate Law:
Escondido Probate Law is an experienced probate attorney. The probate process has many steps in in probate proceedings. Beside Probate, estate planning and trust administration is offered at Escondido Probate Law. Our probate attorney will probate the estate. Attorney probate at Escondido Probate Law. A formal probate is required to administer the estate. The probate court may offer an unsupervised probate get a probate attorney. Escondido Probate law will petition to open probate for you. Don’t go through a costly probate call Escondido Probate Attorney Today. Call for estate planning, wills and trusts, probate too. Escondido Probate Law is a great estate lawyer. Affordable Legal Services.
My skills are as follows:
● Probate Law: Efficiently navigate the court process.
● Estate Planning Law: Minimize taxes & distribute assets smoothly.
● Trust Law: Protect your legacy & loved ones with wills & trusts.
● Bankruptcy Law: Knowledgeable guidance helping clients regain financial stability.
● Compassionate & client-focused. We explain things clearly.
● Free consultation.
Services Offered:
| estate planning | revocable living trust | wills |
| living trust | family trust | irrevocable trust |
Map To Steve Bliss Law in Temecula:
https://maps.app.goo.gl/oKQi5hQwZ26gkzpe9
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Address:
Escondido Probate Law720 N Broadway #107, Escondido, CA 92025
(760)884-4044
Feel free to ask Attorney Steve Bliss about: “Are there ways to keep my estate private after I pass away?” Or “What court handles probate matters?” or “Do I need a lawyer to create a living trust? and even: “How soon can I start rebuilding credit after a bankruptcy discharge?” or any other related questions that you may have about his estate planning, probate, and banckruptcy law practice.