Preventing Family Conflict And Disputes Over Your Estate Plan

By becoming aware of some of the leading causes of conflict over your estate plan, you’re in a better position to prevent those situations through effective planning. Though it’s impossible to predict how your loved ones will react to your estate plan, the following issues are among the most common catalysts for conflict.

Poor Fiduciary Selection

Many estate planning disputes occur when a person you’ve chosen to handle your affairs following your death or incapacity fails to carry out his or her responsibilities properly. Whether it’s your power of attorney agent, executor, or trustee, these roles can entail a variety of different duties, some of which can last for years.

The individual you select, known as a fiduciary, is legally required to execute those duties and act in the best interests of the beneficiaries named in your plan. The failure to do either of those things is referred to as a breach of fiduciary duty.

The breach can be the result of the person’s deliberate action, or it could be something they do unintentionally by mistake. Either way, a breach—or even the perception of one—can cause real and understandable conflict between your loved ones. This is especially true if the fiduciary attempts to use the position for personal gain, or if the improper actions negatively impact the beneficiaries.

Common breaches include failing to provide required accounting and tax information to beneficiaries, improperly using estate or trust assets for the fiduciary’s personal benefit, making improper distributions, and failing to pay taxes, debts, and expenses owed by the estate or trust.

If a suspected breach occurs, beneficiaries can sue to have the fiduciary removed, recover any damages they incurred, and even recover punitive damages if the breach was committed out of malice or fraud.

Solution: Given the potentially immense responsibilities involved, you must be extremely careful when selecting your fiduciaries and make sure everyone in your family knows why you chose the person you did, and that the person you choose knows how to do the job—and do it well. You should only choose the most honest, trustworthy, and diligent individuals, and be careful not to select those who might have potential conflicts of interest with beneficiaries.

Furthermore, it’s crucial that your estate planning documents contain clear terms, spelling out a fiduciary’s responsibility and duties, so the individual understands exactly what’s expected of him or her. And should things go awry, you can add terms to your plan that allow beneficiaries to remove and replace a fiduciary without going to court.

As your Personal Family Lawyer®, we can assist you with selecting the most qualified fiduciaries; drafting the most precise, explicit, and understandable terms in all of your planning documents; as well as ensuring that your family understands your choices, so they do not end up in conflict when it’s too late. In this way, the individuals you select to carry out your wishes will have the best chances of doing so successfully—and with as little conflict as possible.

Contesting The Validity Of Wills and Trusts

The validity of your will and/or trust can be contested in court for a few different reasons. If such a contest is successful, the court declares your will or trust invalid, which effectively means the document(s) never existed in the first place. This would likely be disastrous for everyone involved, especially your intended beneficiaries.

However, just because someone disagrees with what they received in your will or trust doesn’t mean that person can contest it. Whether or not the individual agrees with the terms of your plan is irrelevant—it is your plan after all. Rather, they must prove that your plan is invalid (and should be thrown out) based on one or more of the following legal grounds:

• The document was improperly executed (signed, witnessed, and/or notarized) as required by state law.
• You did not have the necessary mental capacity at the time you created the document to understand what you were doing.
• Someone unduly influenced or coerced you into creating or changing the document.
• The document was procured by fraud.

Additionally, only those individuals with “legal standing” can contest your will or trust. 

Just because someone was intimately involved in your life, even a blood relative, doesn’t automatically mean they can legally contest your plan.

Those with the potential for legal standing generally fall into two categories: 1) family members who would inherit—or inherit more—under state law if you never created the document, and 2) beneficiaries (family, friends, and charities) named or given a larger bequest in a previous version of the document.

Solution: There are times when family members might contest your will and/or trust over legitimate concerns, such as if they believe you were tricked or coerced into changing your plan by an unscrupulous caregiver. However, that’s not what we’re addressing here.

Here, we’re addressing—and seeking to prevent—contests that are attempts by disgruntled family members and/or would-be beneficiaries seeking to improve the benefit they received through your plan. We’re also seeking to prevent contests resulting from disputes between members of blended families, particularly those that arise between spouses and children from a previous relationship.  

First off, working with an experienced lawyer like us is critically important if you have one or more family members who are unhappy—or who may be unhappy—with how they are treated in your plan. This need is especially true if you’re seeking to disinherit or favor one member of your family over another.  

Some of the leading reasons for unhappiness include having a plan that benefits some children more than others, as well as when your plan benefits friends, unmarried domestic partners, or other individuals instead of, or in addition to, your family. Conflict is also likely when you name a third-party trustee to manage an adult beneficiary’s inheritance to prevent them from being negatively affected by the sudden windfall.

In these cases, it’s vital to make sure your plan is properly created and maintained to ensure these individuals will not have any legal ground to contest your will or trust. One way you can do this is to include clear language that you are making the choices laid out in your plan of your own free will, so no one will be able to challenge your wishes by claiming your incapacity or duress.

Beyond having a sound plan in place, it’s also crucial that you clearly communicate your intentions to everyone affected by your will or trust while you’re still alive, rather than having them learn about it when you’re no longer around. Indeed, we often recommend holding a family meeting (which we can help facilitate) to go over everything with all impacted parties.

Blended Families Increase Likelihood For Conflict

Outside of contests originated by disgruntled loved ones, the potential for your will or trust to cause dispute is significantly increased if you have a blended family. If you are in a second (or more) marriage, with children from a prior relationship, your children and spouse often have conflicting interests, which can lead to conflict.  

Solution: To reduce the likelihood of dispute, it’s crucial that your estate plan contains clear and unambiguous terms, spelling out the beneficiaries’ exact rights, along with the rights and responsibilities of executors and/or trustees. Such precise terms help ensure all parties know exactly what you intended.

Additionally, if you have a blended family, it’s absolutely essential that you meet with all affected parties while you’re still alive (and of sound mind) to clearly explain your wishes directly, if you hope for your loved ones to love each other after you are gone. Sharing your intentions and hopes for the future with your new spouse and children from a prior relationship is hugely important to avoid disagreements over your wishes for them.

When it comes to inheriting your estate, your new spouse and your children from a prior marriage have inherently conflicting interests. For one, if your new spouse inherits everything you have when you die, your children from a prior marriage could receive nothing when your new spouse dies, unless you’ve planned in advance to ensure your assets are held in trust for your new spouse to be used during his or her life, and then stipulated that the balance should mandatorily pass to your children upon your spouse’s death.

But that creates yet another potential conflict.

For example, your new spouse may choose to invest the assets conservatively, ensuring they have enough money to live comfortably for a few more decades instead of investing assets for growth. However, the children—particularly if they are younger—might be better off having the assets placed into higher-risk investments, which can offer better returns in the long run, but leave less income for the surviving spouse.

In that case, it’s best to name a neutral third party as successor trustee, so both the children and surviving spouse’s interests can be balanced fairly. 

Prevent Disputes Before They Happen

The best way to deal with estate planning disputes is to do everything possible to make sure they never occur in the first place. This means working with us, your Personal Family Lawyer® to put planning strategies in place aimed at anticipating and avoiding common sources of conflict. Moreover, it means constantly reviewing and updating your plan to keep pace with your changing circumstances and family dynamics.

Whether the potential dispute arises from disgruntled heirs, sibling rivalries, or the conflicting interests of members of your blended family, as your Personal Family Lawyer®, we are specifically trained to predict and prevent such conflicts. Meet with us today to learn more.

This article is a service of Sky Unlimited Legal Advisory PC, Personal Family Lawyer ®. We don't just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That's why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you've ever been before, and make all the best choices for the people you love. You can begin by calling our office at (650) 761-0992 today or book online to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.