When conducting estate planning, many California residents decide that using more than a will to provide for family members after death would best suit their wishes and the needs of their loved ones. In some cases, they will use trusts to fulfill those requirements. The problem is that placing certain conditions on distributions could lead to trust litigation.
Trust creators, or grantors as they are called, can stipulate that a beneficiary meet certain requirements in order to receive distributions from the trust. For instance, a beneficiary may need to receive a college degree, to complete alcohol or drug rehabilitation or get a job. In the interim, the grantor could allow certain expenses to be paid on behalf of the beneficiary.
Even though a grantor may include these types of stipulations in the trust, there is a limit. For instance, a beneficiary cannot be told what religion to follow or to divorce a spouse. The conditions need to be reasonably met by a beneficiary. In addition, doing so puts pressure on the trustee to keep close tabs on a beneficiary to ensure he or she meets the requirements included in the trust. Some beneficiaries may feel they have no other choice but to walk away in order to live life on their own terms.
In other cases, a beneficiary may challenge the conditions through trust litigation. In order to see whether a challenge is possible, it may be beneficial to seek out information regarding his or her rights as a beneficiary and an understanding of the potential legal options. A California attorney who understands the law under these circumstances could prove invaluable in answering these questions and assisting in taking the next step.
Source: recordonline.com, “Bonnie Kraham: You can make an inheritance conditional upon certain standards”, Bonnie Kraham, March 1, 2018