In some cases, this type of lawsuit says more about the people involved than the plan itself. Regardless of the cause, estate litigation will usually have far-reaching and long-lasting consequences for family relationships. Knowing about some of the problems may make the issues easier to avoid entirely.
The most common causes of estate litigation include the following:
- UNDUE INFLUENCE: This can arise when someone is pressured by a relative, friend, or other person to include certain provisions in the plan, or to make significant changes to an established plan. Changes often work to disinherit certain people, or to change the beneficiaries of the plan from family members to a charity, caretaker, or advisors. The best way to avoid this problem is to include only yourself and your spouse in the planning sessions. Having trusted advisors at your side can help overcome this type of problem.
- LACK OF CAPACITY: A will or trust can be declared void if someone can prove that the testator lacked capacity to understand the financial makeup of his or her estate, and/or to understand how it is being distributed. Usually, incompetence is established through a prior medical diagnosis of dementia or some similar disease. As our society ages, this can become more and more of an issue in estate planning. Making sure that your wishes are not challenged means making sure that you take all necessary precautions. Nowadays, when attorneys and other advisors have any doubt about competency, they may suggest a medical examination and a letter from a doctor regarding competency. While this could be viewed as embarrassing or an invasion of privacy, it is done with good reason. It simply means that your advisors are watching out for you to make sure that your wishes are honored.
- IMPROPER EXECUTION OF DOCUMENTS OR FORGERY: In most states, proper execution of a last will and testament or trust requires that the will or trust is signed by the client and witnessed and signed by two unrelated parties. Some states also require affirmation from a notary public or attestation statements from the witnesses in addition to their signatures. A plan can be contested on the basis that it was not properly drafted, signed, witnessed, or notarized. Of course, if anyone suspects that the documents or the signatures are forged, that will bring a lawsuit. There are many examples of well-known people, including a US Supreme Court justice, who took unusual and sometimes ineffective steps to set out their wishes. An easy way to solve this problem is to make sure that your documents are drafted by a competent attorney well versed in estate planning.
- BREACH OF FIDUCIARY DUTY: Everyone has seen stories in the news about families fighting over a loved one (or their money). Recently the papers were filled with questions about the famous top 40’s radio announcer, Casey Kasem, whose family spent time and money fighting over his well-being (and his whereabouts.) Executors, trustees, and guardians, all have a fiduciary relationship and responsibility. They are required to perform with loyalty, honesty, and prudence in the best interests of the beneficiaries. When those duties are not met, litigation can ensue. It is important to make your instructions clear and plain so that trustees and executors, and their legal advisors, can understand and follow your wishes. In addition, your estate planning instructions should include a way for the beneficiaries to remove and replace an executor or trustee who is not fulfilling his or her fiduciary duty, without going to court.
The best way to minimize the risk of litigation is to be thoughtful in creating your plan and then working with competent professionals to implement and maintain it. The collaborative approach will go miles towards making sure your wishes are respected.
If you have questions, contact us to have our office call to set up a time to discuss this with you.