Why should I make a trust? This is a common question. In this series of posts, here’s twenty great reasons to have a trust!
Part E: Trusts Are Easier to Use than Wills.
17. A Will is easier to challenge than a trust.
A trust only requires the signature(s) of the makers(s), called “trustor(s),” “grantor(s),” or “settlor(s).” It is advisable to have it notarized as well, but that is not required. A Will is much more formal. It must be signed in the presence of two witnesses. Both witnesses must also sign
it, in the presence of each other and in the presence of the person making the Will, and the witnesses must attest to certain facts. The witnesses cannot be anyone named in the Will. The sufficiency of any of these formalities can be challenged in court — the more the requirements, the easier the challenge. For a trust, the only requirement is signature of the settlor. A notarized document fairly well takes care of that.
A trust is also more difficult to challenge on the grounds of lack of capacity or undue influence. To challenge a Will, one only need prove that the testator was incapacitated or being unduly influenced at the moment the Will was signed. A trust, on the other hand, is operative and being used by the settlor during life. A challenger needs to prove not only that the settlor was incapacitated or being unduly influenced at the time the trust was signed, but also during all times tha the settlor could have changed it thereafter. If the settlor is actively using the trust (especially if the settlor is also the trustee), and was competent at any time, then presumably he agreed with the terms of the trust, or he would have fixed it himself.
Finally, it is easier for a challenger to raise an objection in a probate proceeding because the action is already pending. Someone wanting to challenge a trust must affirmatively initiate an action. This means the challenger will have to fund more of the costs of the action “up front.” Stirring up a court action may also alienate family members to a greater degree than would raising an objection in an existing probate proceeding. This can pressure a challenger into waiving the challenge, or more readily settling the matter.
18. A trust more easily moves with you from state to state.
A Will’s validity will be decided under the law of the state where you signed it, but it’s meaning may be interpreted under the law of the state in which it is being probated. Thus, for example, if the state where you signed it automatically includes adopted persons within the meaning of “children,” but the state where you die does not include adopted persons unless you specifically mention them, the effect of your Will could change dramatically.
This problem does not exist with a trust. Both the validity and meaning of the trust will be interpreted under the law of the place where it was signed, or under the law of the state specified in the trust. Usually, the only thing that changes when you move to another state are the laws governing administration (what are the trustee’s automatic powers, what rights to accountings and information do the beneficiaries possess, etc.) The exception is when there are special requirements in the second state, which the state’s public policy mandates be implemented, but that issue does not often arise. (For this reason, though, it’s a good idea to have your trust reviewed by an attorney in the new state, just to be sure.)