Unusual decisions. Secrets. The sudden, intense involvement of new friends. Suspicion of undue influence. These are the kinds of circumstances that can lead to a will or trust being legally challenged. Then too, more ordinary human errors, like failed familial communication, can also result in contests to otherwise carefully made estate plans. With good, proactive and professional help, families can avoid the unnecessary distress of a contested estate plan.
Contesting A Will or Trust
Challenges to estate plans are notoriously disruptive for families. Litigation takes time, costs money, and exacerbates conflicts. Indeed, with grief and strong emotions added to the mix, the process of contesting a will or trust can lead to irreparable harm among relations and friends. Fortunately, as attorney Davis Schilken points out, legal contests over estate plans, can be prevented via honest communication, careful, expert guidance, and documentation:
While it’s not always comfortable to discuss end-of-life decisions with family, clear communication can go a long way in preventing misunderstandings and disputes. Let your loved ones know the broad strokes of your plan, especially if you’re making choices that could be perceived as unusual or controversial (e.g., unequal distributions among children). When beneficiaries understand your reasoning, they’re less likely to contest your decisions.
One common ground for contesting a will or trust is to claim the creator lacked the mental capacity to make sound decisions. To guard against this, especially if you’re elderly or in declining health, consider obtaining a letter from your physician stating that you are of sound mind. You might also video record the signing process to show you were acting of your own volition and fully understood the contents of the document.
While working with an experienced, independent attorney to create, and periodically update an estate plan that clearly reflects your goals and intentions, you can also work to document the rationale for your decisions, prevent later claims of undue influence, by ensuring “the person receiving the most from your estate isn’t present during your legal meetings or document signing,” and, even consider the inclusion of a no-contest clause: “This provision states that if a beneficiary challenges the document and loses, they forfeit their inheritance. While not foolproof, this can be a strong deterrent for those who might otherwise consider a legal challenge.”
Another important way to ensure an estate plan is smoothly carried out is through the careful selection of the fiduciary. When a will anchors an estate plan, this designee is usually referred to as the executor; when a trust is involved, the fiduciary is referred to as a trustee. In both cases, the chosen fiduciary has a legal responsibility to the estate and its beneficiaries. While it’s common practice to designate close relations or friends to fiduciary roles, it is possible, and sometimes best, to appoint a professional fiduciary: “Family members may be tempted to challenge your plan if they perceive the executor or trustee is biased or acting unfairly. Appointing a neutral third party—such as a professional fiduciary or trust company—can minimize potential conflicts and help ensure your wishes are carried out impartially.” Charles Hunsinger at Burns & Levinson observes that though professional fiduciaries charge for their services, fees must be reasonable, and the assistance of an experienced fiduciary can turn out to be very helpful and reassuring: “This option will ensure that the estate or trust is administered according to a professional’s fiduciary duties and responsibilities and should help prevent waste, mismanagement, and other issues with the estate. A professional fiduciary can be an attorney, a banker, a trust company employee, or even an accountant.”
Given the significant responsibilities involved in serving as a fiduciary, a type of bond, referred to as a fiduciary bond or an estate bond, is often required. Essentially, fiduciary and estate bonds serve as a guarantee that duties will be carried out in accordance with the law and in the best interests of the estate and its beneficiaries. Colonial Surety is here to help, whenever any type of fiduciary or estate bond is needed. As a leading national provider of many types of bonds, Colonial Surety makes it easy and speedy to obtain them. Simply: get a quote online, fill out the information, and enter a payment method. Print or e-file the bond from anywhere.
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Good To Do: An Ounce of Prevention
During estate planning, experienced attorneys keep an ear out for the potential of familal conflict, and even help to facilitate difficult conversations. As Robert J Varak points out, proactive attention to possible difficulties is best practice in estate planning:
Open and candid conversations with family members about the estate plan may head off any surprises that could lead to contesting wills.The death of a loved one results in an emotional grief that, when combined with large sums of money on the line, can cause the beneficiaries of the will or trust or the heirs of the deceased to challenge the validity, interpretation, or administration of the will or trust.
Bonding Solutions for Professional Fiduciaries
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