Can A Trust Be Contested in Maryland?

Trusts are a way to set up a legal framework to benefit someone or something you care about. This could be a family member or friend, a group of people, a company, a charitable organization, or something else entirely. People set up trusts to streamline estate planning, make sure assets go where they want them to go, and for beneficial tax purposes, among other things. However, sometimes, a trust may be contested by someone else who does not want a trust to be carried out a certain way or believes that the trustee is going against the rules of the trust.

In Maryland, trusts are able to be contested when someone believes that they are not being facilitated properly, when there is a belief that the trust was not legally created, or that a mistake was made in the creation of the trust.

For help with your specific problems, call our Maryland estate and trusts lawyers from Rice, Murtha & Psoras at (410) 694-7291.

Are You Able to Contest a Trust in Maryland?

Trusts are able to be contested in Maryland, but only under certain circumstances. Trusts are generally contested for three main reasons. First, the assets of the trust were not managed properly. This could mean they were managed incompetently or against the wishes of the trustor. Second, the trustee was favoring one beneficiary over another or otherwise going against the trust instrument. Finally, trusts are contested when there is suspected “self-dealing,” meaning that the trustee is using the trust to benefit themselves rather than the beneficiaries.

Reasons to Contest a Trust in Maryland

There are many different reasons why someone may want to contest a trust. Essentially, when there is a belief that the trust was not set up correctly or is not being administered correctly, anyone with a stake in the trust can contest it. We’ll go over some of the reasons why someone may want to contest a trust below. Our Bethesda, MD estate and trusts lawyers can help you out whether you are looking to deal with someone contesting a trust or want to contest a trust yourself.

Improper Execution

A trust can be contested if a party believes that it was made incorrectly. So, if the trustor did not carry out a declaration of trust effectively, the trust may be void. This is generally remedied by courts reading a trust in the way the trustor intended and recreating it in the correct manner.

Undue Influence

Under Md. Code, Ests. & Trusts Art., § 14.5-405, trusts are void (i.e., have no effect) if they were created with “fraud, duress, or undue influence.” Fraud means that it was represented that the trust was for one purpose, but the funds are being used for another. For example, if a trust was set up to benefit a charity, but the real purpose was to pay for the trustee’s vacations, that would be a trust created with fraud. Duress means that someone was unwillingly forced to make the trust. For example, a trust would be made under duress if the trustee and beneficiary threatened the trustor with lawsuits if they did not create a trust.

Finally, undue influence can make a trust void. Undue influence means that someone induced someone else to act in a way they otherwise would not. Usually, undue influence includes some kind of power imbalance between the influencer and the influence. For example, if an attorney threatens to not make a trust unless the trustor agrees to certain conditions, that would be considered undue influence. The attorney has the power to help out the trustor but is withholding that help unless the trustee agrees to something.

Violation of Fiduciary Duty

Trusts can also be contested if it is believed that the trustee violated their fiduciary duty to the beneficiary. A “fiduciary duty” is a legal obligation to act in another party’s best interest. In the case of a trust, the trustee has a fiduciary duty to act in the beneficiary’s best interest. For example, suppose a trustee has a trust with money in it that the trust document allows them to invest prudently. If the trustee invests those funds in a pyramid scheme, they would not be acting in a way that benefits the beneficiary and would be violating their fiduciary duty.

Rule Against Perpetuities

There is something in law that affects trusts called the “rule against perpetuities” Essentially, the trust must benefit someone who is currently alive at some point definitively in the future. The rule against perpetuities is a particularly tricky legal concept that does not apply to every case. However, our lawyers may be able to use it to help your situation if it makes sense to do so.

How to Contest a Trust in Maryland

In order to contest a trust in Maryland, you need to file a lawsuit that disputes the legality of the trust. Trusts are often used in connection with wills, estate planning, and probate. Trusts are much more difficult to contest than wills because of this requirement to file a lawsuit.

Under Md. Code, Ests. & Trusts Art., §14-302, there are a number of outcomes that are possible if you successfully contest a trust in court. The most likely outcome is that the court will order the trust to be administered as close as possible to the intent of the person who made the trust. The court is “fixing” the issues with the trust document that do not match up with the trustor’s vision. This could include appointing a new trustee, interpreting the trust document differently, or other measures as the court sees fit.

Call Our Maryland Estate and Trusts Lawyers Right Away

Rice, Murtha & Psoras’s Frederick estate and trusts lawyers can help with your trust dispute needs when you call us at (410) 694-7291.