Avoiding Estate and Trust Litigation

by Mary Hodges

At the core of most law suits is one common element: money. While truth and justice might be part of the litigant’s goal, the moral outcome of the case is often less important to the parties than the money. How often do we see cases where an injustice has been served and rather than fully getting down to the truth, the parties agree on confidential settlements? The aggrieved party will often forego seeing the truth exposed if it means the opposing party’s checkbook will surface instead.

While money is an essential factor in most litigation, there are some areas in which it is not always about the money. Emotions play more of a role in Estate and Trust litigation than most other areas. First and foremost, families are dealing with the loss of a loved one. Emotions often times influence legal disputes when people feel they were treated unfairly or when one person is being treated more favorably than another with regards to the deceased’s estate. One might believe that the death of a family member brings the family closer because they lean on each other for support and have a new found appreciation of one another yet often the administration of a deceased’s estate pull families apart.

For instance, imagine a scenario where an adult in her 40’s loses a parent. Shortly thereafter, the woman learns that her parent left a sizeable portion of his estate to his 23 year old girlfriend that he kept a secret from his family. As one can imagine, this would leave a very bitter taste in the deceased’s daughter’s mouth. Naturally, the deceased’s family members are uneasy about the legitimacy of his choices. Was he improperly influenced? Why would he do such a thing? Was he insane!?

Most commonly, Will contests or disputes involve claims of undue influence or allegations that the testator did not understand the nature his or her actions when making the Will. Several methods can be used to reduce these disputes. A Will can include an “in terrorem” or forfeiture clause. This clause provides that anyone who disputes or challenges the instrument will forfeit all or part of their bequest. This sounds like the perfect solution but not all states enforce such clauses or some states have specific rules and exceptions when enforcing these clauses. For instance, states that have adopted the Uniform Probate Code only enforce a forfeiture clause when the person challenging the instrument does not have a reasonable basis for the challenge. Florida, for example, does not enforce in terrorem clauses at all; whereas New York and California enforce them to the full extent. Therefore, it is important to know whether or not, or to what extent, a specific estate enforces such provisions.

One could use a revocable or even irrevocable trust in lieu of a Will. Having a trust during one’s lifetime reduces challenges to its validity because it is more likely that the creator of the trust is aware of its terms during his or her lifetime.

In addition, if a client plans to disinherit an heir or make a bequest that he or she believes will cause turmoil (such as 23 year old girlfriend in the above scenario), it can sometimes be wise to counsel your client to inform family members in advance of his or her intentions. While this could cause problems for the client during his or her lifetime, it will reduce the likelihood that one will challenge the instrument, or be successful in the challenge when the deceased made his or her intentions clear.

Issues surrounding estate planning can be very sensitive and it is important to get an understanding of the client’s family dynamic as well as the client’s objectives in order to determine the best possible plan for the client and his or her family.

After all, “Never say you know a man until you share an inheritance with him.” – Joan Kaspar Lavater