Avoid These 2 Common Causes For Dispute Over Your Estate Plan—Part 1
We know that you trust your loved ones and want to give them the world, which is why it can be hard for you to consider a future where they battle each other in court over inheritance issues or how to handle incapacity. Unfortunately, we see it all the time and know that you need to prepare for such an eventuality.
Family dynamics are extremely complicated and can be prone to conflict during even the best of times, so when tragedy strikes a key member of the household even minor tensions and disagreements can explode into bitter conflict. Add access to money is on the line and the potential for discord is exponentially increased.
The good news is you can drastically reduce the odds of such conflict through estate planning with the support of a lawyer who understands and can anticipate these dynamics. It is so important to never rely on generic, do-it-yourself planning documents found online because even the best sets of documents will be unable to anticipate and navigate complex emotional matters like this.
By becoming aware of some of the leading causes of such disputes, you’re in a better position to prevent those situations through effective planning. Though it’s impossible to predict what issues might arise around your plan, the following 2 things are among the most common catalysts for conflict.
1: Poor fiduciary selection
Whether it’s as your power of attorney agent, executor, or trustee, these roles can entail a variety of different duties, some of which can last for years, which is why many planning disputes occur when one of these people fails in handling their responsibilities. 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. Either way, a breach, or even the perception of one, can cause serious conflict among your loved ones, especially 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/or 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: Since a fiduciary carries a lot of responsibility, choosing an honest, trustworthy, and diligent person is extremely important, as is ensuring that your family knows who you have chosen and why so that it is less likely for tension to crop up in the future. Keep in mind that your fiduciary should not have a potential for conflict of interest with your chosen beneficiaries.
To help your fiduciary, it’s vital that your planning documents contain clear terms spelling out their responsibilities and duties so that they understand exactly what’s expected of them. Furthermore, include a way for your beneficiaries to remove and replace a fiduciary without going to court in case something goes wrong.
We can assist you with selecting the most qualified fiduciaries, drafting precise, explicit, and understandable terms in all of your planning documents, and ensuring that your family understands your choices. 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.
As your Personal Family Lawyer®, we can guide you to make informed, educated, and empowered choices to protect yourself and the ones you love most. Contact us today to get started with a Family Wealth Planning Session.
Next week, we’ll continue with part two in this series discussing common causes for dispute over estate planning.
This article is a service of Levi Alexander, 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 today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.
