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Even with the most carefully worded and administered trusts, it is still possible that there will be disputes, whether that stems from confusion about the trust’s wording, concerns about the trustee’s behavior, or even suspicions of undue influence or fraud. Whether you are the person with the dispute, another beneficiary, or a trustee, in these situations it is a good idea to consult a lawyer. An Austin estate planning attorney can make sure you get the full picture.

What Happens If a Beneficiary Disputes the Terms of a Trust in Texas?

What happens in this situation will depend on the matter that is under dispute, as there are a number of different scenarios where a beneficiary might dispute the terms of a trust. The first of these relates to ambiguous language. Sometimes a trust document uses vague or contradictory language, which can create confusion about the true intent of the creator (also known as the settlor or grantor).

Another area that may cause disputes to arise relates to concerns that the trust is not a true reflection of the settlor’s wishes. This may come about if someone suspects that the settlor was pressured or otherwise influenced into agreeing to the terms of the trust, that they lacked the mental capacity to consent to the terms of the trust, or that the trust itself was obtained through fraud or forgery. A trust can be challenged under any of these disputes.

Trustees are required to act in line with the terms of the trust and to seek the best interest of the beneficiaries. If a beneficiary believes that the trustee is mismanaging assets, favoring one beneficiary over another, or acting improperly, they may dispute how the trust is being administered. Sometimes, however, a dispute relates to the legal validity of a trust. The trust must comply with the Texas Trust Code and other relevant statutes. If it doesn’t, parts of it might be invalid.

What Should I Do If I Want to Dispute a Trust?

Texas courts generally uphold trusts unless there’s strong evidence of a defect. Courts place great weight on honoring the settlor’s written intentions. To successfully dispute a trust, you must have solid evidence and not just suspicion or anger. If you are considering disputing the terms of a trust, your first step should be consulting a knowledgeable attorney. We can help you assess whether you have a valid claim, gather evidence, and advise you on the next steps. 

However, if an informal resolution isn’t possible, formal litigation becomes necessary. If mediation fails or isn’t appropriate, the next step is filing a lawsuit in a Texas probate or civil court outlining the specific reasons you are disputing the trust. If the case goes to trial, a judge will ultimately decide the dispute. Their primary goal will be to honor the settlor’s true wishes while protecting beneficiaries’ rights. Depending on the facts, the court might invalidate part or all of the trust, reform the wording of the trust to better reflect the settlor’s intent, remove and replace the trustee, and even award damages to beneficiaries.

What Should I Do If Another Beneficiary Has Raised a Dispute?

If someone else is disputing the terms of a trust that you are also a beneficiary of, you have a few important options and responsibilities. The most important thing is to stay informed. You should not assume that the other beneficiary’s goals align with your best interests. Sometimes disputes can lead to major changes in how the trust is interpreted, divided, or administered, and this will affect you. You have the right to see a copy of the dispute (such as a court petition or filing), and you should review it carefully. It is a good idea to get independent legal advice and your own legal representation. 

Even if you ultimately support the other beneficiary’s position, you want someone looking out for you specifically, not just the group generally. You might have to choose whether to actively join the lawsuit, oppose it, or stay neutral. If the dispute could increase your share or correct wrongdoing, you might support it. If the dispute could decrease your share, harm the trust, or delay distribution, you may want to oppose it. We can help you to decide if it would be best to formally intervene or simply monitor the situation.

It is common to settle disputes out of court, and you may be invited to participate in mediation or settlement negotiations. Settlements can restructure distributions or modify trust terms, and you need to make sure your interests are protected and that you fully understand the trade-offs before agreeing to anything.

What Should I Do If I Am a Trustee of a Disputed Trust?

If you are a trustee facing a dispute from a beneficiary, you also have both rights and obligations. You must continue to act in the trust’s best interests, avoid self-dealing, and follow court orders. However, you are also entitled to legal representation and advice and can pay for this representation from the trust. It is not a sign of wrongdoing to consult a lawyer; rather it is a responsible action to ensure that you are acting according to the terms of the trust.

Consult an Austin Estate Planning Attorney

Every trust dispute is unique. The facts, the people involved, and the trust terms all matter. That’s why it’s essential to seek personalized legal advice early. As attorneys, we frequently assist clients in understanding and addressing these situations. If you believe the terms of a trust are unfair, unclear, or the result of wrongdoing, you are entitled to question and challenge those terms. Whether it’s through informal negotiation, mediation, or a full court trial, we are ready to help you understand your options and pursue the best course of action.