How Beneficiaries, Trustees, and Personal Representatives Can Avoid Litigation
The last thing you want to happen after your death is that your children and loved ones become embroiled in a lawsuit, fighting over your estate in a will contest. Strange things happen (or perhaps we should say people act strangely) when money is at stake. But litigation should be avoided at all costs. It tends to become a defining moment in a family – something that divides families for generations to come. The costs of litigation have been known to wipe out entire estates so that no one receives anything, except the lawyers of course.
The best way to avoid litigation is to go through a program of comprehensive estate and financial planning, making your wishes crystal clear, and putting into place the legal tools necessary to enforce your wishes. But even with the best plan, you can’t guarantee that litigation will not occur. People can sue anyone for anything at any time – and you never know when a disgruntled ex-spouse or distant relative will appear to file a claim against an estate.
A will contest challenges the admission of a will to probate or seeks to revoke the probate of a will that is already pending before the Probate Court. Because a trust is not part of the public record in the same way that a will is, it is usually tougher to contest the terms of a trust. But it’s not impossible. The most common six causes of action in both will contests and estate litigation include the following:
- LACK OF CAPACITY – Under the law, a testator is required to have mental competency to make a Last Will and Testament or trust and to understand the nature of his or her estate assets and the people to whom the estate assets are going to be distributed. A will or trust can be declared void if lack of capacity can be proven. Usually, incompetence is established through a prior medical diagnosis of dementia, senility, Alzheimer’s, or psychosis.
- UNDUE INFLUENCE – When the testator is compelled or coerced to execute a will or trust by a relative, friend, trusted advisor, or health care worker, that is called undue influence. In many cases, the undue “influencer” will upset a long-established estate plan where the bulk of the estate was to pass to the descendants or close relatives of the decedent. In other cases, one child of the decedent will coerce the parent to write the other children out of the will or trust causing a will contest.
- LACK OF FORMALITIES – In most states, proper execution of a Last Will and Testament or trust requires that the will or trust is signed by the testator and witnessed and signed by two unrelated parties. A Last Will and Testament can be contested on the basis that it was not properly drafted, signed, or witnessed in accordance with the law.
- BREACH OF FIDUCIARY DUTY – The personal representative of an estate or the trustee of a trust owes the beneficiaries of the estate or trust certain fiduciary duties of honesty, prudence, and loyalty. When those duties are violated by a trustee or personal representative, a cause of action arises.
- ELECTIVE SHARE – Some states provide an elective share to surviving spouses, which provides the surviving spouse with a portion of the deceased spouse’s estate according to a statutory formula. Deadlines may be associated to make the elective share.
- FORGED DOCUMENTS – If someone suspects that estate planning documents such as a will or a trust are forged, or that signatures have been forged, there will definitely be a legal challenge to the plan.