Legal and Ethical Requirements of a Meeting of Interested Parties During The Estate Planning Process and Post Mortem
Edited by Judith Stalk
Eventually all the interested parties in trusts and estates conflicts must meet to address the issues. Getting to that moment and during such a meeting can be treacherous. Attorneys attending my Estate Conflict Management workshops around California have at times very divergent opinions on how to avoid, conclude or at a minimum manage conflict that arises after the death of the testator. Though there is near consensus that eventually all the interested parties must meet to address the issues. To have a productive meeting that concludes in an enforceable written settlement agreement requires certain legal and ethical criteria be met. There are differences of opinion on approaches, techniques and ethical requirements. There are even differences of opinion on the standard of care and best practices because this dynamic area of practice is emerging and evolving.
The question of whether to hold a meeting of interested parties during the estate planning process is discussed here not because it is recommended, but because such a meeting might be productive in the appropriate instances. Only a small number of attorneys, less than 20% of those at workshops believe it can be worth the trouble. “Having such a meeting during the estate planning process can be so complicated that the testator would not want to have it.”2 Such a meeting could, however, resolve the conflicts that are likely to arise upon the testator’s death.
A meeting held post mortem would have a very different dynamic from any meeting held during the estate planning process. In some families, the glue which may have held the family together would no longer be present. “Isn’t that the meeting when the gloves come off?”3 “Beneficiaries will complain that they are powerless and nothing is happening, that things are taking forever. The trustee will report that everyone is complaining ‘You’re abusing your power’ and that no one appreciates how much work it is being trustee.”4 An heir who is disinherited or overlooked in the distribution may interpret the notice of the meeting as an invitation for negotiation and for looking at their options. “If I feel I’ve been aced out and I’ve been invited to a meeting, I’m wondering if they are going to offer me something.”5
Agreements reached at either of these meeting opportunities can avoid post-mortem litigation, help maintain family harmony, preserve the testator’s plan of distribution and conserve the estate from expensive attorney fees.
Who Should Attend These Meetings
When meetings such as these are called, the estate planning attorney, or post-mortem, the trustee or attorney for the trustee, can invite interested parties such as heirs, beneficiaries, disinherited and potentially contesting parties. An attorney at a workshop indicates when he represents one of the parties other than the trustee he will invite all interested parties to meet.6 It may be beneficial to include prospective trustees, spouses, representatives of beneficiary charities, attorneys for each party and a mediator. Sound like a can of worms? It is.
While some attorneys at the workshops have suggested inviting all stakeholders, others have suggested these meetings might better be handled in stages by first inviting only the heirs, beneficiaries and disinherited and potentially contesting parties. Then inviting other interested persons to subsequent meetings. It is important to invite all the stakeholders, as much of the family as you can get there, all the interests, all the factions.7 Several attorneys have suggested inviting the accountant or financial advisor who the heirs might already know and trust to “go over the economics of the situation.”8
Attorneys argue that there are benefits and problems when spouses are present. Some attorneys conclude that spouses are not direct stakeholders and can be disruptive. “Including spouses opens a bigger can of worms. They have different motivations. Some spouses drive the whole thing.”9 “Spouses cause more trouble than anybody else at the table.”10 Other attorneys suggest that if the true decision maker is the spouse, it is better to include them at the meeting. Otherwise, progress can be delayed or stymied by the party who must consult their absent spouse before making a decision.
Attorneys Present at Meetings
Some attorneys at the workshops indicate advising parties to bring an attorney warns them there is going to be trouble, creates distrust and leads to posturing, or having the attorneys present can so change the dynamic of the meeting that the parties will not be participating. “The attorney is perceived as a power figure.”11 Yet, if there is an agreement reached at the conclusion of such a meeting virtually all attorneys attending workshops agree that to have a binding and enforceable agreement, each party should have the agreement reviewed by their own attorney before signing. “If one of the parties signs a settlement agreement without consulting with an attorney that party can wiggle out of it”12 “asserting they did not know what they were doing.”13
If a party has legal representation at the meeting, a preliminary issue is: Who does this attorney represent? One of the greatest fears expressed by participants at Estate Conflict Management workshops is the possibility that a party would mistakenly believe a particular attorney represented them when the attorney did not. The safest approach suggested at the workshops is for each attorney to provide a representation letter to all participants.
The overwhelming majority of attorneys at the workshops want meetings to be confidential. Only a small number of attorneys have mentioned that they want the ability to take the depositions of persons at such meetings if no settlement was reached. (“If I can ask a party at the meeting ‘Mom told me you’re a drunk and beat up your brothers’ and the answer is ‘Yes’, I want to be able to use that answer in a later court proceeding.”14) In order to maintain confidentiality, most attorneys opine it would be necessary to have a mediator facilitate so the conversations would be protected by mediation confidentiality statutes. Some attorneys believe it would be necessary to have a mediator “to run the show and deal with the attorney power figures. Parties might not speak openly otherwise (presumably in a private caucus meeting with the mediator).”15
A meeting held during the estate planning process or post-mortem can reveal conflicting positions, driven by a lifetime of passionate interests, that can fuel bitter disputes. Interests are something that drive positions. For example, one stakeholder may have the position of claiming a disproportionate share of the estate, based on the belief that being the testator’s sole care giver during the last years of the testator’s life entitles the stakeholder to that compensation. The sense of entitlement is the interest driving the position. Another stakeholder may believe they are entitled to their proportionate share of the estate notwithstanding what the testator has provided for in the trust or will. Other interests may run much deeper, founded on events from childhood when “Dad gave my sister a teddy bear when I was three and I didn’t get one” or from the belief that “Dad loved me more than my siblings.” And yet sometimes principle is often the driving force. “This is what Dad wanted and I deeply believe we must carry it out.” However it is not uncommon that there are different interpretations of what Dad wanted.
On occasion in mediation I have seen an heir attempt to control the process and be disruptive with the objective of leveraging her position to get more of the pie at the end of the day. Often these underlying issues or difficult personalities need to be addressed during a confidential private session with a neutral person, to discuss, understand and fully appreciate the underlying interests in order for the party to reach sufficient flexibility and make progress on the larger positional issues to attain resolution.
Once there is an agreement in principle reached, a binding, written settlement agreement should be signed. “Write it and sign it as soon as possible before someone changes their mind.”16 Ultimately there is a common goal and interest among all players and that is usually resolution, sooner than later. “Get it over with. Get a distribution.”17 There can be no distribution until then.
The distinction between traditional estates litigation and Estate Conflict Management is the pace of addressing conflicts. Hold a meeting of critical players as soon as practical. At some point all players must receive notice of right to counsel. The meetings are most productive if confidential and facilitated by a mediator. The objectives of this meeting, whether during the estate planning process or post mortem, are to resolve estates conflict much sooner, and by meeting some of the deepest needs of each of the parties. Document the agreement immediately. This will lead to the common goal among all parties: distribution.
Next: Chapter 9: What provisions can be added to estate planning documents that may help avoid or at least manage conflicts post mortem? This chapter also includes a summary of take-aways from all nine chapters of the Estate Conflict Management series.
- 1. Copyright 2009 by Paul Fisher
- 2. Attorney at South Bay Legal Consortium workshop.
- 3. Attorney at San Fernando Valley Estate Planning Council workshop.
- 4. Attorney at Alameda County Estate Planning Council workshop.
- 5. Attorney at South Bay Legal Consortium workshop.
- 6. Attorney at Alameda County Estate Planning Council workshop.
- 7. Attorney at Sacramento Estate Planning Council workshop.
- 8. Attorney at San Fernando Valley Estate Planning Council workshop.
- 9. Attorney at the Redwood Empire Estate Planning Council workshop.
- 10. Attorney at Long Beach Estate Planning Council.
- 11. Attorney at the Redwood Empire Estate Planning Council workshop.
- 12. Attorney at San Bernardino County Bar Association workshop.
- 13. Attorney at Riverside County Bar Association workshop.
- 14. Attorney at San Mateo County Bar Association workshop.
- 15. Attorney at Sacramento Estate Planning Council workshop.
- 16. Attorney at the Sacramento Estate Planning Council workshop.
- 17. Attorney at the Sacramento Estate Planning Council workshop.