By Taylor Haley
In the first part of this series, we discussed one of the most frequent causes for dispute over your estate plan. Here, we’ll look at another leading cause for dispute and offer strategies for its prevention.
No matter how well you think you know your family, you can never predict how they’ll behave when you die or if you become incapacitated.
Family dynamics are complicated and prone to conflict during even the best of times, but when tragedy strikes a key member of the household, minor tensions and disagreements can explode into bitter conflict. And when access to money is involved, the potential for discord is exponentially increased.
No one wants to believe their family would ever end up battling one another in court over inheritance issues or a loved one’s life-saving medical treatment, but we see it all the time.
This is especially true for those who rely on do-it-yourself estate planning documents found online.
The good news is you can dramatically reduce the odds of such conflict by enlisting the support of an experienced lawyer to assist you in creating your estate plan. Even the best set of documents will be unable to anticipate and navigate the complex emotional dynamics that make up your life and family, but we can.
Last week, we discussed one of the most common reasons for dispute, poor fiduciary selection, which involves selecting the wrong trustee, executor, or guardian for your kids. Today, we focus on another leading catalyst for conflict: contests to the validity of your will and/or trust.
The validity of your will and/or trust can be contested in court for a few different reasons. If such a contest is successful, the court declares your will or trust invalid, which effectively means the document(s) never existed in the first place. Obviously, this would likely be disastrous for everyone involved, especially your intended beneficiaries.
However, just because someone disagrees with what he or she received in your will or trust doesn’t mean that person can contest it. Whether or not the individual agrees with the terms of your plan is irrelevant; it is your plan after all. Rather, he or she must prove that your plan is invalid (and should be thrown out) based on one or more of the following legal grounds:
Furthermore, only those individuals with “legal standing” can contest your will or trust. Just because someone was intimately involved in your life, even if they’re a blood relative, doesn’t automatically mean they can legally contest your plan.
Those with the potential for legal standing generally fall into two categories:
1) Family members who would inherit, or inherit more, under state law if you never created the document.
2) Beneficiaries (family, friends, and charities) named or given a larger bequest in a previous version of the document.
Solution: There are times when family members might contest your will and/or trust over legitimate concerns, such as if they believe you were tricked or coerced into changing your plan by an unscrupulous caregiver. However, that’s not what we’re addressing here.
Here, we’re addressing—and seeking to prevent—contests that are attempts by disgruntled family members and/or would-be beneficiaries seeking to increase the benefit they received through your plan. We’re also seeking to prevent contests that are a result of disputes between members of blended families, particularly those that arise between spouses and children from a previous marriage.
First off, working with an experienced lawyer is of paramount importance if you have one or more family members who are unhappy—or who may be unhappy—with how they are treated in your plan. This need is especially critical if you’re seeking to disinherit or favor one part of your family over another.
Some of the leading reasons for such unhappiness include having a plan that benefits some children more than others, as well as when your plan benefits friends, unmarried domestic partners, and/or other individuals instead of, or in addition to, your family. Conflict is also likely when you name a third party trustee to manage an adult beneficiary’s inheritance because he or she is likely to be negatively affected by the sudden windfall of money.
In these cases, it’s vital to make sure your plan is properly created and maintained to ensure these individuals will not have any legal ground to contest your will or trust. One way you can do this is to include clear language that you are making the choices laid out in your plan of your own free will, so no one will be able to challenge your wishes by claiming your incapacity or duress.
Beyond having a sound plan in place, it’s also crucial that you clearly communicate your intentions to everyone affected by your will or trust while you’re still alive, rather than having them learn about it when you’re no longer around. Indeed, we often recommend holding a family meeting (which we can help facilitate) to go over everything with all impacted parties.
Outside of contests originated by disgruntled loved ones, the potential for your will or trust to cause dispute is significantly increased if you have a blended family. If you are in a second (or more) marriage, with children from a prior marriage, there’s an inherent risk of dispute because your children and spouse often have conflicting interests.
To reduce the likelihood of dispute, it’s crucial that your plan contain clear and unambiguous terms spelling out the beneficiaries’ exact rights, along with the rights and responsibilities of executors and/or trustees. Such precise terms help ensure all parties know exactly what you intended.
If you have a blended family, it’s also essential that you meet with all affected parties while you’re still alive (and of sound mind) to clearly explain your wishes in person. Sharing your intentions and hopes for the future with your spouse and children is key to avoiding disagreements over your true wishes for them.
The best way to deal with estate planning disputes is to do everything possible to make sure they never occur in the first place. This means putting in place planning strategies aimed at anticipating and avoiding common sources of conflict.
Proper estate planning can keep your family out of conflict, out of court, and out of the public eye. If you’re ready to create a comprehensive estate plan, contact us to schedule your Family Wealth Planning Session. Even if you already have a plan in place, we will review it and help you bring it up to date to avoid heartache for your family. Schedule online today.
My goal is to be your trusted advisor who helps you make the very best personal, financial, and legal decisions for your family throughout your lifetime. I want to help you not just now, but also when you can’t be there so that I can help guide your loved ones through a difficult process.