A will isn't just part of a parent's estate plan: it's an attorney's paradise.
Sure, it's someone's stated intention for his assets, but it's also a great opportunity for dysfunctional families to air their grievances one last time. If you don't hand your will to an attorney or an advisor, it gives siblings, spouses and other heirs an opportunity to accuse each other of tampering and duplicity. Even if the will is in safe hands, it has to head to probate court where it has to get the approval of all of the family members named in it.
That leaves the door open for disputes and years-long delays. That potential makes Jay Freireich, an estate planning attorney for Brach Eichler LLC in Roseland, N.J., a very happy man.
“I'm not going to go home to my wife and say, 'You're not going to believe this, but I just did a will for somebody and they left everything to their kids,'" Freireich says. "It's just not exciting. But when you have two brothers fighting over their dad's estate, and one got less than the other and they didn't think that was right -- or when you get the kids from the first marriage versus the second wife who comes in and the old man leaves everything to the second wife, who dies soon thereafter and now the stepkids get everything and the kids don't -- I just love this stuff.”
When a will is drafted and assets are evenly distributed, Freireich's job can get fairly boring. Most don't typically require his involvement beyond the planning stages. Even when there are minor conflicts involved, Freireich notes that the vast majority of those cases end in confidential settlements in which no one admits liability. However, when a parent either plays favorites or doesn't make his or her intentions clear, that can result in disaster after he or she passes away.
"I had a mother-daughter conflict, I've had brother-brother, most of them are the second-marriage wife and the kids from the first marriage,” Freireich says. “I had a case where the kids from the first marriage and the second wife were fighting over a coffee table, and we actually tried the case. It wasn't like a special coffee table: it was like a $1,000 coffee table.”
“We won, by the way, and it cost her a lot more than $1,000 to litigate this case,” he adds.
So what do you do to prevent a spouse, child or sibling from disputing a will?
Catherine Taylor, a director at Citrin Cooperman LLC in New York specializing in trusts and estates, suggests sussing out potential issues as early as possible.
“I have an issue with that right now -- it came up in a meeting yesterday,” she says. “The testator has very specific things that she wants to occur on her passing, but she is concerned because she is favoring one of the sons -- and it's because she's closer to one child than she is to the other -- and she thinks it's going to set up animosity between the two sons after she passes, where right now they have a pretty decent relationship.”
Taylor suggested that the client put all of her assets into a revokable trust. That keeps the will out of court, it keeps the favored son from becoming the executor of the estate (that falls to a trustee instead) and prevents that son from needing the consent of his brother to be the executor.
“One of the problems is that, in estates, you have a lot of emotion surrounding death to begin with,” Taylor says. “With that heightened emotion, egos get bruised incredibly easily and things get blown up incredibly easily. Being able to take it away from having a probatable estate just takes that component out.”
Not only does placing assets in a trust bring a third party into play as a trustee/mediator, if assets are placed into separate trusts for each child or spouse, it becomes more difficult for each to know about the other's share. The other wonderful thing about what I do is that typically, when you're fighting over dad's money, you don't concern yourself with the cost of the suit, because it is not your money that you're fighting over. They tend to be more willing to fight, because it's someone else's money. However, if assets fall outside of a trust, there are a few compelling arguments that family members can make to dispute the terms of the will. They can try to claim that their deceased parent or spouse wasn't mentally capable of drafting a will, but that's more of a long shot.
“All you need for capacity is three things: you need to understand the basic nature of your assets, you need to understand who your loved ones are and who the natural bounty would be and you know who it is that you're giving your assets to,” Freireich says. “That's a really low, low standard, so those challenges to actual capacity to do a will are virtually nonexistent.”
Failing that, you could imply that a spouse or sibling exerted undue influence over the deceased loved one during the estate planning process and managed to get an extra cut of the inheritance out of the deal. If family members say you've been pushing them away and you don't have emails or invitations indicating otherwise or if you offer your parent or spouse the use of your attorney or give them a ride to the attorney's office, that's all going to put you in a tough position should the will be disputed.
“It's hard to get a will tossed, period, but it's much easier to get a will tossed because of undue influence than it is to toss a will for lack of capacity to make a will,” Taylor says. “If the person drove you to the appointment, made the appointment, talked to the lawyer -- every time you pick up a law journal, there's a case in it where someone called the attorney, told the attorney about mom's situation, told them about all the assets, told mom what to do, drove mom to the attorney's office, walked into the office and introduced her to the attorney and walked out of the room while she signed the documents.”
You'll want evidence that everything about the estate planning process took place on neutral ground. If dad wrote you a letter explaining why he left you everything or left his daughters letters saying why he didn't leave them anything, that's evidence. If the parent makes clear in the will reasons why they're making provisions for certain family members and not for others, that's also helpful. Finally, if an attorney is on hand to take notes and assistants are there to serve as witnesses to a will signing or even to gather video evidence of that signing without undue influence, that only helps matters.
However, flat-out disinheriting of certain relatives without warning rarely works out well for anyone other than the deceased.
"The biggest thing is people making a decision to disinherit a child, but then don't tell the child because they don't want lifetime issues, and I understand that, but then it comes as a huge surprise," Taylor says. "It just adds another layer of emotion to the whole thing."
Taylor notes that any time such a scenario arrises and someone is either disinherited or there's an imbalance in the inheritance, she always has a conversation about why it's happening or whether or not the family knows or understands why it's happening.
“I was in one a couple of weeks ago where a woman was disinheriting three out of her four children,” Taylor says. “I had to say, 'Are you sure this is exactly what you wanted?' and her response was, 'Three of them had sued me, so, yeah, I do want to do it.' So they were on notice that she wasn't real happy with them.”
Freireich notes that he hasn't yet had a client tell him, “I want to contest my father's will even though this is what he told me that he wanted.” Instead, clients regularly come to him saying, “This couldn't be what dad would have wanted” because of a complete lack of communication. However, he notes that it takes a special set of circumstances for family members to reach a point where they're disputing a will.
“I'm typically dealing with a dysfunctional family dynamic, because a functional family dynamic leaves everything to everybody equally and there are no issues,” he says. “The normal, harmonious family -- the 'Leave It To Beaver Family' -- gets its shares equally.”
But as people live longer and family members find themselves responsible for their parents' or spouse's care, even a “normal” family dynamic can strain a bit. Taylor notes that children who spend years caring for parents while siblings live their lives elsewhere may make claims for reimbursement for caregiving expenses or even for their time. If that doesn't create friction between the caregiver child and other children, it can create stress for the person setting up an estate plan.
“There are sometimes clients who are afraid that if they upset the child who's been helping them out all these years, that they're going to pull their care as this client is aging,” Taylor says. “That's a terrifying thing, so they'll give that child more just so they don't upset them, even though they may want to split their assets equally.”
So, instead of having a situation in which family member's are accusing a family member of raiding mom or dad's bank account or pushing that parent for a bigger inheritance, both Freireich and Taylor suggest either dividing assets equally, communicating directly or, failing all of the above, making your will part of a trust and appointing an attorney or advisor as an independent trustee to carry out your wishes and stay above family disputes.
“They all end up hating the advisor,” Taylor says, “But that doesn't matter, because the advisor isn't sitting across the Thanksgiving table from them.”
This article is commentary by an independent contributor. At the time of publication, the author held TK positions in the stocks mentioned.