A study conducted by TD Bank found that estate tax was not the biggest concern among America’s estate planners — family drama was. The study showed 44% of estate planning professionals cited family fights as the biggest threat to estate planning in 2018. Only 25% of estate planning professional cited tax reform as a problem and 12% expressed a concern about the economy and market volatility. Riverside estate planning attorney Dennis M. Sandoval weighs in with this personal experience . . .
In dealing with our estate planning clients, we have found that there is now a culture where family members, especially children, have a sense of entitlement to an inheritance after the death of the surviving parent. They have no concept of what an expectancy is – the fact they are expecting an inheritance, but for many reasons, they may not receive one.
One of our estate planning clients was a survivor of the Holocaust. She desired to leave all her estate to charities who provided for orphans. When we questioned her about her family, she indicated she had a wonderful son who she was very proud of. We then asked her whether she had discussed her plan with her son and she said no, that he was a good boy and he would understand her motivations.
When we asked if she had any other children, she said yes, she had a daughter who was a drug addict and who she had been estranged from for decades. She said that she had tried to help her daughter out on several occasions and it had always ended up with a further decline in their relationship. She was very concerned that her daughter might challenge her desire to leave all her assets to charity. When we asked her if she had discussed her desires with her daughter, she said no and that she had no desire to do so.
Given her fear that her daughter might try to challenge her estate plan and based on own experience in dealing with family members in similar situations, we suggested our client rethink her plan and leave at least a portion of her estate to her son and daughter. This would give them something to lose should they chose to challenge the estate plan. If they were unsuccessful in challenging her estate plan, the”no contest clause” would cause them to lose their inheritance. This would create a disincentive for them to want to challenge her estate plan.
Next, we suggested she document all her reasons why she desired to leave the bulk of her estate to charities who provided for orphans. We also suggested she write a personal letter to her son expressing her pride in what a good son he was and telling him why she preferred to leave the majority of her wealth to charity rather than to him. We further suggested she write a personal letter to her daughter expressing her regret that things had worked out as it had, but that she stilled loved her despite the fact they had been estranged for years. She complied with our request and gave us a great background information on why benefiting orphans was such a high priority in her life. She further produced a very heart felt and tear-jerking letters for each of her children about her love for them and how she hoped they would understand and honor her desires to benefit orphans after her death.
Our client unexpectedly died a short time after we prepared her estate plan and she had completed the background information and letters to her children. When we met with the children a short time after their mother’s death and informed them of their mother’s estate plan, the reaction was one that would have floored their mother. The “bad” daughter thought her mother’s plan was fantastic. She was thrilled that her mother had left her a little something and that she had taken the time to express her feelings in the personalized letter to her. The “good son” was infuriated, stating he had always done the right thing and that he and his family should have inherited all of his mother’s wealth. He said she must not have known what she was doing at the she prepared her estate plan and he intended to challenge it in court. Fortunately, he read his mother’s letter several times over the next few weeks and eventually called us a to let us know he had changed his mind and would do nothing to try to upset his mother’s trust and Will.
Not all estate plans have such great results, but proper planning in advance can greatly diminish the possibility of family fights, challenges to a Will or trust and the extensive litigation and the associated legal fees that come with it. Visit the website of Riverside probate and estate planning lawyer, Sandoval Legacy Group, a division of Holstrom, Block & Parke, A Professional Law Corporation to learn more.
Have a question? Ask Dennis.