Articles: Trust Litigation

There is a blind spot at the center of American inheritance law. In the late twentieth century, revocable living trusts (rev trusts) replaced wills as the main estate planning tool. More recently, the widespread use of these mechanisms and the unprecedented amount of wealth passing between generations has reportedly caused an increase in trust litigation. But we know remarkably little about trust disputes. Data about trusts is notoriously elusive: unlike wills, which pass through probate court-a jurisdictional silo that helps researchers find relevant cases-trusts are private instruments that can be litigated in multiple forums. This Article starts to fill this gap by offering the first empirical study of trust litigation. It reviews thousands of civil filings to identify every contested trust proceeding that came on calendar between 2014 and 2020 in San Francisco Superior Court. This dataset of 640 petitions reveals four major points. First, a blessing of rev trusts-that, unlike wills, they allow a successor trustee to manage a settlor’s property long after death-is also a curse. This administrative process is the catalyst for roughly 75% of the lawsuits in our research. Second, although “will contests” (attempts to invalidate a will) have a reputation for being “strike suits” (groundless allegations brought to extort a hasty settlement), there is little evidence that trust litigation suffers from the same problem. Few trust petitioners settled quickly or accepted pennies on the dollar. Third, trust litigation has distinct pathologies. Cases often involve a clash between siblings, seem fueled as much by family dynamics as legal merit, and raise complex substantive and procedural issues. Fourth, devices that are intended to deter or efficiently resolve trust litigation diverge wildly in their effectiveness. No-contest clauses (which disinherit beneficiaries who pursue certain kinds of relief) and mandatory arbitration provisions (which have been a topic of much recent debate) play almost no role in the cases, but court-sponsored mediation reliably produces settlements.