Can a trust be rendered invalid?

On Behalf of | Mar 6, 2023 | Estate Planning

A trust is a legal entity that enables you to give another person the right to hold title to your assets and property for the benefit of your beneficiaries. When done right, a trust can help protect your assets and heirs from probate court and creditors.

Unfortunately, just like a will, a trust may sometimes be rendered invalid upon a successful contest. Therefore, ensure you do everything by the law when setting up a trust to ensure it meets your goals. 

What may make your trust invalid?

There are some common pitfalls that may invalidate your trust and hinder your heirs. Some of these pitfalls include the following: 

Improperly funding the trust

A trust without funds or assets is useless. Remember, your trust only has control over the assets you transfer into it. Therefore, even if you leave instructions on how your assets should be distributed, the instructions will be useless if the assets aren’t held in the trust. What’s more, any assets that aren’t titled correctly in the trust may need to go through probate.

Not meeting the trust elements

  • For a trust to be valid, some elements must exist during the creation process, such as:
  • Certainty of intent to create the trust
  • Certainty of the subject matter, including assets over which the trust will be established

Certainty of objects, which includes beneficiaries who will benefit from assets held in the trust

If any of the above elements are lacking, then your trust may be rendered invalid. To prevent such a situation, consider taking a proactive approach, like having a medical evaluation of your mental capacity when creating the trust. This will help resolve questions about your mental capacity at the time the trust was created, should they arise.

As you may have gathered, there are a number of pitfalls that can invalidate your trust. Therefore, consider seeking help to ensure your trust is legally binding.