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Litigation Red Flags:

 

Litigation related to Trusts and Estates is on the rise.  I have an expression “money makes people funny”.  Not funny in the humorous sense, funny as in difficult to explain, strange or odd.

 

In my office hangs the following quote from our beloved former President, Abraham Lincoln:

 

Discourage litigation.  Persuade your neighbors to compromise

whenever you can.  Point out to them how the nominal winner

is often a real loser – in fees, expenses, and waste of time. 

As a peacemaker the lawyer has a superior opportunity to

being a good man.  Never stir-up litigation, a worse man

can scarcely be found than one who does this.

 

Sage advice but ever so often unheeded.  Here are a few things to think about.

 

Last Minute Planning:  Worst time to sign a Will is when you’re suffering from some life-threatening illness.  Like Nike says “Do it now!”.  I’ve witnessed Wills in Hospice situations which were ultimately admitted to Probate but in a few situations, it was costly and all so time consuming.

 

Do it yourself documents:  A Will written and executed under the supervision of an Attorney is presumed valid.  You get no presumptions of validity with homemade products.  There are just too many facets to Estate Planning to learn overnight.  Issues of Probate, estate taxes, income taxes, choice of Executors, Trustees and Guardians, beneficiary designations, TOD (Transfer on Death) designations, joint property, international beneficiaries, estate liquidity and family dysfunction may be overlooked.  Don’t be penny-wise and pound-foolish.

 

Blended Families:  With the case of social media it is not uncommon for many of my clients to find companionship a second or third time around.  This is a good thing in my opinion.  Studies show we are likely to live longer when we are in a committed relationship.  But this is where careful and well communicated estate planning is most needed.  Who gets to stay in the house and for how long?  Who pays the expenses?  These are difficult questions but need to be addressed if you want your loved ones to remember you fondly.  There are no right or wrong answers here as there isn’t always enough assets to make everyone happy.  The key is that there are no surprises after you’re gone, as they always cause alienation and often give rise to litigation.

 

Inconsistent Estate Plans:  Your Will does not override your beneficiary designations.  It’s actually the other way around.  If your Will says divide everything equally but your assets are structured unevenly, animosity can result.  An expectation that your children “will do the right thing” isn’t advisable.  After all, what is the right thing? Reasonable minds differ.

 

Estate Settlement Process:  Your Executor calls all the shots.  There are lots of decisions related to the sale of assets, division of “stuff” and payment of obligations.  When the estate is winding down, an informal accounting is prepared and the beneficiaries release the Executor in exchange for their inheritance, in effect approving what has been done.  I believe in communicating with the beneficiaries periodically, sharing unforeseen obstacles causing delay to maintain harmony.  If an informal accounting cannot be reached, the Executor must seek a judicial accounting and litigation is likely to ensue.  This is especially important in blended families as the old saying goes “blood is thicker than water”.