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Newport Beach Trust Lawyer on the Elements of a Valid Trust

Posted by Susan Katzen | Nov 27, 2022 | 0 Comments

When creating a trust with a Newport Beach trust lawyer, it is important to understand the specific roles involved. The grantor is the person who establishes a trust. The designated beneficiary is the person who receives the assets held in trust when the grantor dies. Probate is unnecessary because trust property passes outside the last will and testament or intestacy law.

When a grantor creates a trust, they can appoint a trustee. A trustee is a person who manages the assets in the trust and oversees distribution upon the grantor's death.

It's possible for someone to be the grantor and trustee if they establish a living trust and manage it while alive. However, naming a successor trustee is crucial so someone else can take over when the grantor dies.

Elements of a Valid Trust

Setting up a valid and legally enforceable trust requires following state laws and meeting various conditions, such as:

  • The grantor has the mental capacity to establish a trust and understand the effects of their actions
  • There must be a named trustee
  • The grantor should outline the duties and rights of the trustee
  • There is a clear intent for the grantor to create the trust
  • The grantor must own assets or property to transfer into the trust at the time of creation
  • The legal document must include named beneficiaries
  • The trust must be validly executed according to state law
  • The trust must be funded

Common Factors that Invalidate a Trust

A range of factors can contribute to a trust the court can't validate. The most common reasons include:

  • Missing signature on the legal document
  • Engaging in fraud to convince the grantor to include specific terms in the trust
  • Failure to follow legal formalities while executing the trust
  • Someone established the trust by forging signatures
  • A person with interests in the trust assets coerced or threatened the grantor into creating the trust
  • The grantor didn't have the mental capacity to understand what they were doing at the time of establishing the trust

How to Challenge the Validity of a Trust

You must pursue legal action if you believe the trust isn't valid. Simply disagreeing with your loved one's decision to leave someone with assets you believe you should have received isn't a good enough reason for a court to invalidate a trust.

You must file a petition with the probate court and explain why you think the trust isn't valid. You must also present evidence to support your claims, such as physical documentation or witness testimony.

Outcome of Assets in an Invalid Trust

If the court decides the trust isn't valid, beneficiaries won't receive the assets according to the deceased's instructions. If no valid trust exists, the property will pass to surviving heirs according to intestacy laws or the deceased's will if they created one.

Contact a Trust Attorney

Trusts are complex legal documents and people naturally have questions about how they should and should not be used as part of a comprehensive estate plan. If you would like to learn more about trusts for yourself or a loved one, our Newport Beach trust attorneys are here to provide clarity and support.  Simply contact us at 714-374-2244 to schedule an appointment with the mention of this blog post.

About the Author

Susan Katzen

"I firmly believe our clients should be treated the way I would want my own family members to be treated. As a result, not only have I put together a compassionate and highly skilled team of people, but together we have served families from the grandparents down to the grandchildren. My staff and...

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