Is There More To Life Than Death, Taxes and Post Mortem Financial
and Emotional Grief?
Edited by Judith Stalk
In workshops throughout California, attorneys estimate the financial cost per party in estate litigation at anywhere from $10,000 to $150,000, and at times astonishingly higher. In Estate Conflict Management workshops held throughout California estate planning and litigation attorneys describe the emotional and financial devastation to the parties involved. From the wreckage we begin to extrapolate the messages that will be the foundation for brainstorming changes in the culture of how estates conflicts can be managed and resolved with less damage to the families.
The traditional role of the estate planner includes minimizing death taxes and avoiding probate. Today, are there additional approaches? “Estate planning concerns death and taxes but it is primarily about a larger subject, and that is people”, something Jerome A. Manning refers to as “the relational estate”.1 Gerald Le Van describes the relational estate as “the whole web of interpersonal relationships that connects [the family] across generations.”2
Le Van concludes, “Neglected relational estates invite trouble.” This is the focus of the discussion that follows.
When During the Estate Planning / Estate Litigation Process Can Conflicts Be Addressed?
When potential conflicts are discovered during a traditional estate planning process, they are often ignored by the estate planning professional. No-contest provisions appear in many traditionally prepared estate plans. The resulting conflicts often end up in probate litigation. This is the conventional “default” approach. During Estate Conflict Management workshops, estate planning and estate litigation attorneys have discussed at least two alternatives: addressing potential conflicts during the estate planning process and creating a mechanism to address conflicts as soon after the death of the testator (post mortem) as practicable. In other words, “We can deal with it now, deal with it later or never”. Otherwise known as the “let them deal with it after I’m gone” approach or the “My kids always get along” approach. During the Estate Conflict Management workshops we discuss, brainstorm and compare the benefits and disadvantages of addressing conflicts at each of these different points in time.
Some estate planning/estate litigation professionals do not encourage addressing conflicts issues during the estate planning process. It is believed that older estate planning clients want to avoid conflict during their life times. One client reported that when he dies, his son and daughter will inform the attorney that they were each told they would run the family business. Both will be telling the truth. In his estate planning documents the client indicates the daughter will run the business and the son will be a consultant and be compensated in a way that is fair to both children. The client does not want to deal with facing each child during his life time. “Let them deal with it after I’m gone.”
Those estate planning professionals who are conflict averse and who do not anticipate likely future battles may later be called as a witness in future litigation.
Addressing Conflicts During The Estate Planning Process — Benefits For The Testator
Judith Stern Peck, director of the Ackerman Institute for the Family in New York refers to this as “preemptive work;” others call it a “preemptive strike.”3 David Gage comments, “These are sleeping giants in the form of litigation from interfamillial controversy, that will awake after the testator’s death”.4
There may be difficulty to a greater or lesser degree in determining from testator clients what they really want to do and whether or not there is a potential for conflict. Clients may be in denial or may not acknowledge the existence of a conflict. Honesty is essential to the creation of an appropriate estate plan. Without an honest open discussion clients may get what they ask for, though they may not fully appreciate the problematic scenario being set up for the next generation(s).
Discussions With The Client
Riverside California Commissioner Paulette Barkeley, the judicial officer who hears all probate cases in that county, comments “Testators do not realize the battles being created for the favorite kids. Most clients never intend that the heirs be involved in World War III with each other and may plan differently if they are forewarned that no one would be getting what the testator wants [as a result of probate litigation].”
It is often felt by estate planning professionals that they have an obligation to explain the consequences of the estate plan. One attorney comments, “Educating clients can help avert conflicts that may come about and can provide confidence for the testators as to what will happen after their deaths.” Many attorneys conclude there is greater comfort in resolution than in non-resolution. Even though most estate planners believe (and some believe strongly) that this is the appropriate practice, a small number say this is not necessary, appropriate or their job.
Another attorney comments, “I tell my client it’s your life and your business. If the client is still in a state of denial, I say ‘this is the way it is.’ It could result in more problems later. It’s like the Fram Oil Filter commercial, you can pay me now or you can pay me later.”
Discussions With The Family
Once the estate plan is completed some testators want to be secretive, to sign the estate plan and “lock it up in a vault.” Others want to tell the family “This is Mom and Dad’s estate plan and this is what you get.” Some attorneys believe that having a disinherited person present creates an opportunity for the testator to explain why he/she has made such gifts, or not. Judge Ludvigsen who is one of the two judges in San Bernardino County who hear all probate cases commented, “if you have a family meeting without the potential contesting party, you’re setting up sides to create a problem.”
An estate planning attorney in the San Fernando Valley area of Los Angeles recommends making sure your client’s goals are carried out. This attorney explains to his clients what the impact of the proposed estate plans will do. He never suggests that his clients have family present during the estate planning meeting. “Do your planning first. If you wish to tell your children after it is done that’s up to you.”
One attorney recommends talking to the kids one on one, not necessarily at a family meeting, to get their ideas, input and preferences. Explain to the kids at the outset of the conversation who the client is: the testator parent.
How Does The Estate Planner Preserve The Testator’s Intent?
It is a common practice of attorneys in California to ask that the client write out in long hand what they want to accomplish and why. A number of attorneys create a detailed memorandum in their client meeting file should they be called upon to testify in the future. A small number of attorneys video tape the signing process, in an attempt to cover possible issues of competency of the testator and undue influence. The client can explain what he is doing, why he is doing it, his thought processes, why he is irritated with one child, or why he thinks his wife is having an affair. Some attorneys videotape only those matters that are emotionally charged or those that look strange, such as an elderly client who the attorney believes may be transferring the estate to persons other than those one would expect.
Judge Ludvigsen points out that video taping the signing process does not always bring finality. Contesting attorneys may still argue that the events leading up to or following the signing were not video taped and contain the “true intent” of the testator, including their lack of competency and whether they were under undue influence at the time of signing.
Next in the series: a discussion of the benefits of addressing conflicts issues during the estate planning process for the heirs, trustee and attorneys. What are the benefits of addressing conflicts issues during the estate planning process when there is a family business or when there has been divorce and remarriage? What are the messages?
To read chapter one in this series, “Conflict Management in Family Inheritance Wars”, click here.
To read chapter two, “There Has To Be A Better Way: The Value of Managing Estates Conflicts”, click here.
- 1. Jerome A. Manning, Estate Planning: How to Preserve Your Estate For Your Loved Ones (2nd ed. 1992).
- 2. Gerald Le Van, “A Family Council for the ‘Relational Estate’”, July 2008, www.levanco.com.
- 3. Wall Street Journal, 10-21-06.
- 4. David Gage, et al, “Holistic Estate Planning and Integrating Mediation in the Planning Process”, 29 Real Prop. Prob. & Tr. J. 509 (2004).