A trust can be contested also.
I would get a medical statement that she is competent
to make legal decisions.
She should have her own attorney that can devise a safe plan
that would be free from undue influence allegations.
Anyone can contest anything-so the plan needs to carefully orchestrated to avoid problems.
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Attorney Pippen is correct. You need to be very, very careful here given your grandmother's condition. Please consult with a solid Washington estate planning lawyer before doing anything with a Living Trust or a transfer thereto.
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Attorney Richard Wills has a website called Washington Probate Litigation which is an excellent resource for persons in your situation. The thing is, your interests and your mother's interests are not exactly aligned, and advice to her from an attorney is separate from advice to you from an attorney.
A well written will contains a clause telling a person who wants to contest the will that if they do, they will get a nominal sum and nothing more. A living trust is a tax and estate planning device that is appropriate in some situations, but not others. Trusting your family members is not really a consideration as to whether a trust would be more effective than a will.
Also, a will deals with her property after she passes, and the issue of her care now, while she is alive, would be covered by a Durable Power of Attorney, which might have a Health Care Directive or not. If she has a DPOA that is great, if she is still competent enough to execute one, that might help her. If she is no longer able to execute documents like this, then the outcome has to be a guardianship if necessary. And her competency would determine whether she could now make a new estate plan.
WA will enforce a properly written will that contains the statutorily-mandated indicia of reliability. No matter what your relatives think. Elizabeth Powell
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I agree with the other comments that your grandmother needs to have her own attorney representing her interest to help her with an estate plan, assuming she is competent. The level of competence required for a will is low, but the less competent she appears the more likely the will is to be challenged successfully. No contest provisions are not necessarily a deterrent, especially where there are viable allegations of lack of competence or undue influence. Another option to consider with your grandmother's attorney if a will contest is expected is to execute a series of wills each with the exact same provisions but on different dates. The person contesting the will provisions will have to invalidate each of the wills in turn. Better yet, if grandma is still clearly competent, have her sit down with the two daughters, perhaps at the attorney's office, and explain to them how she wants to leave her estate and why. This can go a long way to allaying their concerns.
This answer provides general legal information and should not be construed as legal advice to be applied to any specific factual situation. It is not intended to create and does not create an attorney-client relationship. The attorney writing this post is licensed in Texas and Washington only and the laws of your jurisdiction may differ.