How To Prevent an Estate Contest
Avoid Heir Friction
So there’s an estate planning version of an old saying that is worth noting here. It states, “Where there’s a will, there’s a relative.” Hey there I’m Estate Planning attorney Paul Rabalais and in this post I’m going to describe the things that you can do to prevent a battle over your estate when you pass away. So a small percentage of wills and trusts written in America are actually formally contested when the person who made the will or trust dies, but when it happens, the dispute is often ugly, and in most cases, the clash results in close relatives never ever speaking amicably again for the rest of their lives.
So the real reason people quarrel over an estate is because they don’t like the outcome that is being presented to them after someone passes away. But I’ve never seen a successful estate contest based solely on the fact that someone just didn’t like the result that was being presented to them. What often happens is someone is frustrated with the potential outcome of an estate settlement, so they then search for some kind of legal basis to successfully challenge the will, trust or estate, whether that includes a claim that validity requirements were not met, or whether someone lacked the capacity to understand what they were doing when they created their will or trust, or perhaps a claim that someone adversely influenced the will or trust creator.
Now some of you watching this who may suspect there will be some form of a challenge brought against your estate, your executor or trustee, or other heirs after you pass away, may be saying to yourself, “They can fight over my estate all they want…I’ll be dead.” Others of you may feel though that it is worth taking a few steps now to reduce the likelihood of World War III when you pass away. The following are a few things you can do in order to minimize the possibility that the people that mean the most to you will clash over your assets when you’re gone.
1. Get Good Advice. Getting good advice in general will aid in preventing a struggle over your estate. If you get good advice, it’s likely that you’ll meet all of the formalities that are required to make your documents valid (in other words, you’ll dot your i’s and cross your t’s), and your estate documents will written in a way where they could not be subject to different interpretations. In addition, if you anticipate a contest from one or more people, your estate documents can be drafted with focus on minimizing the risk that a particular person would benefit from contesting your estate.
2. Use a No-Contest Clause. The validity or enforceability of no-contest clauses varies from state to state, but even if your state formally does not recognize a clause in your estate documents that says something like, “If any person under this Will contests this Will, any share in my estate given to that contesting person under this Will is revoked,” in certain circumstances the no-contest clause may deter a disgruntled heir from disputing your estate plan.
3. Create Your Estate Plan While Your Capacity Is Good. Waiting to create or change your estate plan until your mind starts to slip is dangerous. Your estate could be successfully challenged if, at the time you created it, you failed to have the necessary capacity to understand what you were doing.
4. Don’t Even Let It Appear That You Are Being Influenced By Someone. It doesn’t look too good after someone dies when an heir accurately states, “My sister called the attorney to make the appointment for Dad. That sister drove Dad to his meeting. She told the lawyer what Dad wanted his Will to say. The Will left more to this sister than any other of Dad’s children, and my sister was right there in the room when Dad signed everything.” You know, whether there was adverse influence or not, that set of circumstances doesn’t sound too good. So the suggestion here is not only, “Don’t let yourself be persuaded into leaving a bequest to someone when it doesn’t feel right,” but also, don’t even let it appear that you were being adversely influenced.”
5. Consider Using Trusts. While trusts can be contested almost as easily as it is for someone to question the validity of a Will, it may make sense to consider creating one or more different kinds of trust in order to minimize the risk of dispute. Generally speaking, the terms of a trust that you create can remain private, so that someone who is excluded from a trust may not be entitled to view the terms of a trust, while your Will becomes public record at the courthouse after you pass away. In addition, instead of leaving assets outright to someone you suspect will dispute your estate, consider leaving those assets to a trust for the benefit of that person. This way, the potential challenger is not a participant in the estate settlement - only the trustee of that trust for the benefit of the potential challenger is a party to the estate settlement.
6. Communicate. Now every will, estate plan, and family are different - the dynamics involved can and do vary widely. But generally speaking, the estate planning legal instruments state what you are doing and who you are appointing to handle certain aspects, but the proper additional and often informal communication to your future heirs will reveal “why” you did what you did. And when a testy heir really understands “why” you did what you did, they may be less likely to stir the pot. Let’s say Mom creates her estate plan and left 80% to child A and 20% to child B. After Mom dies, child B may hire a lawyer and search for some legal basis to challenge Mom’s Will or Trust. But if during Mom’s lifetime, Mom had communicated to child B something like, “The reason I did what I did is because Child A sacrificed her career to take care of me for the last 20 years - she cooked my meals, took me to all of my doctor’s appointments, I don’t know how I would have made it without her. You, on the other hand, never even so much as called me on my birthday.” Now is this kind of communication easy to do - to let someone know they are inheriting less than what they expect? Probably not - but it sure may make things easier for everyone involved in your estate settlement. So, what’s the best way to communicate the “why” to your heirs, or at least to those who you suspect may be disgruntled? Well, you could make a handwritten or typed up letter, you could have a family meeting, you could make a video - you know best how to communicate your “why” based on your particular circumstances and family dynamics, but don’t underestimate how communicating your blunt truth to your future heirs may just be the best thing for everyone involved.
So while I detest estate disputes - professionally I stay away from being a part of them because I’m more in the “avoid estate disputes” business - I hope that this post may spark you to take an extra step or two in order to help maintain, or even enhance, those family relationships after you are gone. Have a great day.