In this article, we explain how to contest a trust in Iowa. Our Iowa trust attorneys answer:
A trust is a legally binding arrangement between three parties where a trustor grants a trustee permission to hold assets on behalf of a beneficiary. Trusts can help an estate avoid probate, allow a trustor to have greater control over how their assets are distributed after they pass, and in some situations, limit estate taxes. There are several types of trusts, including:
For the purpose of this article, we’ll be focusing on three common types of trusts in Iowa.
Revocable trust — Also known as a living trust, this type helps protect an estate from probate, or the legal process of distributing an estate. This type of trust is recommended for trustors who own property in multiple states as it can speed up the estate administration process and cost less. Living trusts go into effect while the trustor is still alive and can be modified as desired.
Irrevocable trust — An irrevocable trust is also a living trust but with much different terms. Once assets are placed in an irrevocable trust, they cannot be amended or removed. Because control of placed assets is relinquished, this type of trust is often put into place to avoid estate taxes.
Testamentary trust — A testamentary trust is different than a living trust because it only goes into effect upon the trustor’s death. It’s created and defined through a will. This type of trust is often put into place when assets are intended for minor children.
Though there are many types of trusts, all with different purposes and benefits, they can all be contested within the Iowa court system.
An heir or beneficiary may wish to contest a trust in Iowa simply because they don’t agree with its terms, but their request will be denied. In Iowa, there are four accepted grounds to challenge the validity of a trust.
The trust is not valid – A trust not properly signed and documented can be successfully contested in Iowa.
The trustor was not of the necessary capacity — If a contester can prove that the trustor was not of sound mind when the trust was drafted and signed, it can be successfully contested.
The trustor was unduly influenced — If a contester can prove that the trustor was influenced or pressured into adjusting a trust, it can be successfully contested.
The trust was procured by fraud — A trust signed unknowingly, or a trust altered after the fact, can be successfully contested.
Even if someone believes a trust to be invalid, they must have legal standing to contest it. This means that their livelihood is personally affected by the trust in question. This could include family members who would likely inherit more if the state oversaw distribution of assets or beneficiaries who at one point held a higher percentage of assets in a prior trust.
No matter the type of trust being contested, the proper documentation must be filed in the probate court with jurisdiction over the trust in question. Once the lawsuit has been filed, the plaintiff, if they are of legal standing, is required to outline legal arguments supporting their contest.
In Iowa, the court is required to investigate contested trusts, with the bulk of responsibility for providing evidence falling on the contester. If a trust is successfully contested in Iowa, the court will likely distribute property in an intestacy scheme, typically starting with the decedent’s spouse, minor children, or other closely related family.
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