It's hard to foresee how your loved ones will act when you die or become incapacitated, no matter how well you believe you know them. Nobody likes to imagine that their family members will wind up fighting in court over inheritance issues or a loved one's life-saving medical treatment, but it happens all the time.
Even under the best of circumstances, family dynamics are complex and prone to conflict. However, when a family member suffers a catastrophe, even little tensions and conflicts can quickly escalate into a disastrous dispute. When money and/or sentimental items such as furniture or jewelry is at stake, the likelihood of conflict increases tenfold. In the end, there is no greater cost to families than the cost of lost connections following a loved one's death or disability.
The good news is that consulting with a competent legacy planning attorney who knows and anticipates these factors can considerably reduce the likelihood of family dispute. One of the key reasons to establish your own legacy plan rather than depending on DIY estate planning documents, is to avoid family dispute. After all, even the most sophisticated paperwork won't be able to predict and handle such complex emotional matters—but we, as your legacy planning attorneys, can.
You'll be in a better position to avoid difficulties over your legacy plan if you're aware of some of the most common causes of disagreements. Though it’s impossible to predict how your loved ones will react to your legacy plan, the following issues are good guideline of the most common catalysts for conflict.
Poor Fiduciary Selection
Many legacy planning disagreements arise when the person you've designated to handle your affairs after your death or incapacity fails to do their designated jobs. These jobs, whether as a power of attorney agent, executor, or trustee, can include a wide range of responsibilities, some of which might continue for years.
The fiduciary you choose is legally obligated to carry out those responsibilities and act in the best interests of the beneficiaries listed in your plan. A violation of fiduciary obligation occurs when one of these items is not fulfilled.
The breach might be intentional or it could be something they do accidently. In any case, a breach—or simply the idea of one—can lead to genuine and understandable resentment between family members. This is especially true if the fiduciary is attempting to profit from the position, or if the wrongful activities have a detrimental impact on the beneficiaries.
Common breaches include failing to provide required accounting and tax information to beneficiaries, improperly using estate or trust assets for the fiduciary’s personal benefit, making improper distributions, and failing to pay taxes, debts, and expenses owed by the estate or trust.
Beneficiaries can petition to have the fiduciary removed, to recoup any losses they suffered, and even to recover punitive damages if the breach was done with malice or fraud.
Solution: Given the potentially large responsibilities involved, you must exercise extreme caution when choosing your fiduciaries. Make sure that everyone in your family recognizes why you picked the person you selected, and that the person you choose is qualified to perform the job. Only choose the most honest, trustworthy, and diligent people, and avoid picking those who could have possible conflicts of interest with beneficiaries.
Furthermore, it's critical that your legacy planning agreements include explicit words defining a fiduciary's obligations and duties, so the individual understands exactly what is expected of him or her. If problems occur, you can include provisions in your plan that allow beneficiaries to remove and replace a fiduciary without having to go to court.
As your attorneys, we can help you choose the most competent fiduciaries, prepare the most precise, explicit, and understandable language in all of your planning documents, ensuring that your family understands your decisions so that they don't end up in disagreement when it's too late. In this way, the individuals you select to carry out your wishes will have the best chances of doing so successfully—and with as little conflict as possible.
Contesting The Validity Of Wills and Trusts
For a variety of reasons, the legitimacy of your will and/or trust might be challenged in court. If such contest is successful, the court will declare your will or trust invalid, which means that they determined the document(s) never existed in the first place. This would certainly be very devastating for all parties involved, particularly your intended beneficiaries.
However, just because someone doesn't agree with what they received in your will or trust doesn't mean they can challenge it. It makes little difference whether or not the individual agrees with the parameters of your plan; it is, after all, your plan. Rather, they must show that your plan is invalid (and should be thrown out) on one or more of the following legal grounds:
The document was improperly executed (signed, witnessed, and/or notarized) as required by state law.
You did not have the necessary mental capacity at the time you created the document to understand what you were doing.
Someone unduly influenced or coerced you into creating or changing the document.
The document was procured by fraud.
Furthermore, only individuals with "legal standing" can challenge your will or trust.
Even if someone were a close friend or a blood relative, it doesn't mean they have the legal right to object to your plan.
Those who have the potential for legal standing fall into one of two categories: 1) beneficiaries (family, friends, and charities) named or given a larger endowment in a previous version of the document, who would inherit—or inherit more—under state law if you never created the document, and 2) beneficiaries (family, friends, and charities) who would inherit—or inherit more—under state law if you never created the document.
Solution: Family members may contest your will and/or trust if they have valid concerns, such as believing you were deceived or coerced into changing your plans by an unethical caretaker.
However, what we're really seeking to address here—and to prevent— are contest attempts by disgruntled family members and/or would-be beneficiaries seeking to improve the benefit they received through your plan. We also want to avoid contests that develop from tensions among members of blended families, particularly those that happen between spouses and children from a prior relationship.
First and foremost, if you have one or more family members who are unhappy—or may be unhappy—with how they are handled in your plan, engaging with experienced legacy planning attorneys like us is crucial. This is especially important if you want to disinherit or favor one family member over another.
Some of the leading reasons for discontent include having a plan that benefits some children more than others, as well as when your plan benefits friends, unmarried domestic partners, 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 to prevent them from being negatively affected by the sudden windfall.
In these situations, it's vital to make sure that your plan is properly constructed and maintained so that these individuals have no legal grounds 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 to go over everything with all impacted parties.
Blended Families Increase Likelihood For Conflict Outside of contests originated by dissatisfied 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 relationship, your children and spouse often have conflicting interests, which can lead to conflict.
Solution: To reduce the likelihood of dispute, it’s crucial that your legacy plan contain clear and concise 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.
Furthermore, if you have a blended family, it's essential that you meet with all impacted parties while you're still alive (and of sound mind) to express your wishes clearly and directly, if you hope for your loved ones to continue to love each other after you're gone. Sharing your intentions and hopes for the future with your new spouse and children from a prior relationship is hugely important to avoid disagreements over your wishes for them. When it comes to inheriting your estate, your new spouse and your children from a prior marriage have inherently conflicting interests. For one, if your new spouse inherits everything you have when you die, your children from a prior marriage could receive nothing when your new spouse dies, unless you’ve planned in advance to ensure your assets are held in trust for your new spouse to be used during his or her life, and then stipulated that the balance should mandatorily pass to your children upon your spouse’s death.
But that creates yet another potential conflict. For example, your new spouse may choose to invest the assets conservatively, ensuring they have enough money to live comfortably for a few more decades instead of investing assets for growth. However, the children—particularly if they are younger—might be better off having the assets placed into higher-risk investments, which can offer better returns in the long run, but leave less income for the surviving spouse.
In that case, it’s best to name a neutral third party as successor trustee, so both the children and surviving spouse’s interests can be balanced fairly.
Prevent Disputes Before They Happen
The best way to deal with legacy planning disputes is to do everything possible to make sure they never occur in the first place. This means working with us, your legacy planning attorneys to put planning strategies in place aimed at anticipating and avoiding common sources of conflict. Moreover, it means constantly reviewing and updating your plan to keep pace with your changing circumstances and family dynamics.
Whether the potential dispute arises from disgruntled heirs, sibling rivalries, or the conflicting interests of members of your blended family, as your Ambitious Legacy Planning Attorneys, we are specifically trained to predict and prevent such conflicts. Contact us today to learn more.
This article is a service of The Ambitious Legacy Firm. We do not just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That's why we offer a Legacy Planning Session, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by using the link below to schedule a call with our Client Services Director, who will be able to guide you on scheduling your Legacy Planning Session, or by emailing us at email@example.com. Mention this article when you reach out to us to find out how to get this $750 session at no charge.
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