Avoid These 2 Common Causes for Dispute Over Your Estate Plan—Part 1

Estate Planning in New Braunfels, San Marcos, and Seguin

By Beverly Davidek

Jul 01

No matter how well you think you know your loved ones, it’s impossible to predict exactly how they’ll behave when you die or if you become incapacitated. Of course, no one wants to believe their family would ever end up battling one another in court over inheritance issues or a loved one’s life-saving medical treatment; but the fact is, I see it all the time.

Family dynamics are extremely complicated and prone to conflict during even the best of times. And when tragedy strikes a key member of the household, even minor tensions and disagreements can explode into bitter conflict. When access to money is on the line, the potential for discord is exponentially increased.

The good news is that 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. This is why it’s so important to work with the right lawyer when creating your estate plan and never to rely on generic, do-it-yourself planning documents found online. Unfortunately, even the best set of documents will be unable to anticipate and navigate complex emotional matters like this, but working with the right trusted advisor can help.

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 with 100% certainty what issues might arise around your plan, the following two things are among the most common catalysts for conflict.

1. 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 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.

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 he or she does unintentionally, by mistake. Either way, a breach—or even the perception of one—can cause serious conflict among 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/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 possibly even recover punitive damages if the breach was committed out of malice or fraud.

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

Moreover, it’s vital that your planning documents contain clear terms spelling out a fiduciary’s responsibilities 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.

Select an attorney who can assist you with choosing 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 choose to carry out your wishes will have the best chances of doing so successfully—and with as little conflict as possible.

This article is a service of Beverly R. Davidek. I don’t just draft documents; I ensure that families and business owners make informed and empowered decisions about life and death, for themselves and the people they love.

Thank you!