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Posted on Tuesday, June 1, 2010
Disputes that arise after a loved one dies can be incredibly destructive, to both assets and relationships. Such disputes can also cause the destruction of the loved one’s intended asset distribution plan. Careful estate planning, carried out with the help of an experienced estate planning attorney, can often avoid estate and trust related disputes entirely or help minimize the damage caused by any disputes which do arise. In this June 2010 installment of our newsletter, we will review the most common types of estate or trust related disputes, and discuss how proper planning could have helped prevent each type of dispute.
Careful fiduciary selection during the estate planning process can often help avoid or minimize the risk that a selected fiduciary will breach his or her duty, by focusing a client’s attention on selecting only those nominees who are most likely to be diligent, honest, and prudent in acting as fiduciaries. Clients should also be advised about issues which can arise when family members are put into fiduciary roles which allow them to control or affect the interests of other family members. Estate planning documents should clearly spell out beneficiaries’ rights and the rights and responsibilities of the fiduciaries, to help ensure that both beneficiaries and fiduciaries are clear about what and how frequently information should be provided, what investments and other transactions may be made, and what rights beneficiaries have with regard to distributions from the estate or trust. Finally, estate planning documents should provide ways for beneficiaries to remove a bad fiduciary without having to bring a lawsuit.
It is important to note that, if you suspect that a loved one is being taken advantage of, you should investigate the situation and take action as soon as possible. Unfortunately, in cases where financial abuse or other inappropriate influence is actually occurring, it is not always possible to catch or stop the bad actor. Such cases can often result in emotional, financial, and even physical devastation for the influenced party as well as his or her family.
How can an estate planning attorney help in these situations? An experienced estate planning attorney who has worked with a client over a long period may be the first person who becomes aware that someone has asked the client to change his or her power of attorney, Will, or trust. That attorney will also be in a good position to tell whether the requested change appears to be consistent with the client’s past history, or whether something seems off. The attorney may also be able to communicate his or her concern to the client, and to refuse to help the client make changes the attorney believes do not truly reflect the client’s intent, or that the client may not have the legal capacity to make.
If the attorney believes that the client is acting on his or her own desires and has the capacity to sign the requested documents, a careful estate planning attorney will walk the client through considering the overall plan, and try to ensure that the client’s actual intent is clearly expressed in the documents. Experienced estate planning attorneys should know when to suggest that a client use documents in addition to a Will, such as a revocable living trust, to help reduce the ability of a contesting party to create havoc with the estate administration process. Good estate planning attorneys also know what steps are required to ensure that Wills and trusts are signed correctly, and they can help ensure that a client’s capacity to sign is verified and well documented in cases where there may be some question. An experienced estate planning attorney will also know what provisions to include in a document to help minimize the risk that anyone will attempt to contest. The attorney should also help you ensure that you know how to own your assets and set up your beneficiary designations, so that they are consistent with your desired estate plan.
It is especially critical that you obtain the advice and help of an experienced estate planning attorney in any situation where you may have one or more family members who are not happy with your desired asset distribution plan, such as where you want to favor some children over others, where you want a third party trustee to manage a beneficiary’s inheritance for him or her because you believe the beneficiary may have problems acting in his or her own best interests (substance abuse, perhaps), where you want to benefit friends, unmarried domestic partners, or other non-heirs instead of or in addition to your family, or where your spouse or partner may not be the parent of some or all of your children.
We always want to help our clients avoid problems, especially those which may not arise until death or disability has happened and which can result in the destruction of a family, a business, or an intended estate distribution plan. If you recognize your own situation or that of someone you know in this article, please feel free reach out to us at (678) 720-0750.