Summary from Preceding Chapters

Over the last two years, I have led 15 Estate Conflict Management workshops throughout California, during which estate planning and litigation attorneys have described the emotional and financial devastation to the parties involved in estates litigation.

There are great potential benefits for all the usual players in estates litigation who address conflicts issues during the estate planning process. The trustor there can attain peace of mind that litigation will not likely distort or even destroy his plan and wishes. The heirs can find comfort in knowing no court battle will ensue after the testator's death. The disinherited or potentially contesting party can find an early resolution to a potential claim. For the persons who loathe the prospect of serving as trustee, there is the knowledge that they will not have the often risky and thankless task of serving. For the attorneys who represent each of these parties there is the prospect of a higher level of professional and financial satisfaction that comes with happier clients who can avoid the tumultuous path of traditional probate litigation.

All of this of course assumes the families are functional, players are reasonable and have exercised the level of flexibility necessary to help bring about an early resolution to conflicts.

Pre-emptive Strike or a Can of Menacing Worms?

What are the possible consequences if during the estate planning process a testator attempts to address conflicts that could arise after his death but does not succeed in finding a solution?

In some families there is a firmly held belief: talking openly about money is as difficult as talking openly about sex. It is simply verboten.

A West Los Angeles estate planning/estates litigation attorney told me, over breakfast, the tale of a client with his own solution for preventing conflict in his family during his life time. The client mentioned that after his death, his son will inform the attorney that Dad said the son will run the family business; and his daughter will also let the attorney know she was told she will run the business. They will both be correct. The client had instructed the attorney to designate the daughter to run the family business and designate the son as a consultant who would 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. The client's position was, "Let them deal with it after I'm gone."

Some clients fear that giving too much financial information to children might corrupt their desire to make a living and instead cause them to adopt a sense of entitlement.

How Do Unsuccessful Attempts to Address These Potential Conflicts Impact the testator?

When the testator learns that Johnny doesn't want to take over the business this can be devastating to the testator.

There are many events that could cause an elderly testator to regret ever opening the discussion of conflicts that are likely to arise as a result of his/her estate plans.

Fear of the possible danger to the elder testator from the person who will inherit a minimal gift, conditional gift (strings attached) or no gift. Fear of threats. Fear of possible elder abuse or financial elder abuse. One of the kids may have a violent temper or have just been released from jail, posing an emotional or physical threat to the estate planning client.

In some instances, if a child's inheritance does not meet his expectations, the child may lobby or even harass the testator until the testator makes a change and the child gets what they want. The testator may reach a stalemate and become paralyzed by the inability to find a solution. If the testator sets up a special needs or spend thrift trust and the child knows about it, "the rotten no good kid" may harass the parent until he/she makes changes in the trust.

Lack of resolution can cause stress, especially to an elderly client. There is the added risk that the last years of the client's life will be distressing, and therefore negatively impact the client's quality of life. As an attorney in Fresno commented, "Ignorance is bliss. Some times my client says 'I don't want to be in a conflict in my last years. Let them fight it out after I die.'"

An attorney in the San Fernando Valley area of Los Angeles told of his client who is the surviving spouse in her second marriage with step children from her deceased husband's first marriage. The client and her step children hate each other. The client said "I don't want to deal with it [facing the conflict]." Another attorney at the workshop quipped, "That's a normal situation in Southern California."

As an attorney in Santa Rosa observed, "If matters are not resolved, you lose control. The testator is still alive, everyone else is in emotional shock and they are angry at the testator. The heirs will each be targets of the other and especially of the disinherited party."

"There are rocks that shouldn't be overturned and if overturned could effect the marriage." Meaning: A couple may have reached an agreement in years past concerning such things as gifts to children or step-children, and that agreement may have been reached after arduous discussions. Addressing potential conflicts may reopen these long agreed upon and buried issues; the opening of a painful wound previously closed and gratefully forgotten.

As an attorney in the South Bay area of Los Angeles observed, "some things cannot be revealed or discussed during the testator's life time; IE. the girl friend, the child no one knows about, the fact a testator doesn't like one of the kids. I have not found any clients who want to raise these issues during their life times. Keep the lid on the volcano."

Several attorneys in Oakland comment, "If you can't get issues resolved then all the beetles come out. Some conflicts cannot be resolved. A client loves each of their children 100% and can't reconcile that with the belief that one of the kids does not deserve a gift, like a share of the family business. This is the internal conflict the client is unable to resolve. If there is a conflict that is unresolved, the first thing that happens is the estate planning professional gets fired. We know too much."

A San Fernando Valley attorney comments, "Many of my clients who are wealthy and who need estate plans will never discuss their estate plans with family members, let alone attempt to resolve conflicts during the estate planning process, if they know it will lead to trouble. Those clients will just walk away from the estate planning process."

Finally, an attorney in the South Bay comments, "Some kids would sue mom during their life time if they knew what the trust said."

What are the messages?

A trial attorney never asks a hostile witness a question unless the attorney already knows the answer. Perhaps the same approach might be prudent in estate planning. Yet taking risks in certain cases has produced some stunningly positive outcomes. Functional families probably do not need the resolution of potential conflicts during the estate planning process, though they can still benefit. The more dysfunctional the family, the less likely such a process would succeed, not withstanding the fact that such a family would benefit from resolution of conflicts before the testator's death.

Next in the series: What are the benefits and disadvantages of addressing post mortem conflicts which could lead to litigation?

To read chapter one in this series, "Conflict Management in Family Inheritance Wars". In a contested matter emotions can run incredibly high. Families leave the probate/estates litigation process exhausted and embittered. Managing estate conflict - both existing and potential conflicts - presents the possibility to deliver much more financial and emotional value to clients, provide higher client satisfaction, and higher personal satisfaction and more client referrals to the practitioner. Click http://www.fishermediation.com/library_family_inheritance_wars.php.

Chapter two, "There Has To Be A Better Way: The Value of Managing Estates Conflicts". The financial cost per party in estate litigation can be from $10,000 to $125,000 and at times astonishingly higher. Estate planning and litigation attorneys describe the emotional and financial devastation to the parties involved. Click http://www.fishermediation.com/library_there_has_to_be.php.

Chapter three, "Is There More To Life Than Death, Taxes and Post Mortem Financial and Emotional Grief?". Testator's benefits of addressing potential conflicts during the estate planning process. Estate planner's possible ethical responsibilities to the testator regarding potential conflicts that may arise after the client's death. Click http://www.fishermediation.com/library_death_taxes.php.

Chapter four, "Benefits of Addressing Conflicts During the Estate Planning Process". To heirs, trustees and attorneys, and the benefits when there is a family business or divorce and remarriage. Click http://www.fishermediation.com/library_estatePlanning.php.

Copyright 2008 by Paul Fisher

Paul Fisher has resolved many hundreds of disputes as Mediator since 1986, and has heard hundreds of cases as Arbitrator since 1978. Paul has been a full time mediator since 1991. From 1971 until 1991, he was in a litigation practice. He is an adjunct professor of law at the Straus Institute for Dispute Resolution, Pepperdine School of Law. In 2001 Paul was named to the Distinguished Panel of Neutrals of New York's CPR International Institute for Conflict Prevention & Resolution. In 2002 he received the Los Angeles County Board of Supervisors Award for Case of the Year. In 2006 Paul was a discussion leader at the Harvard - International Academy of Mediators conference. Paul is a nationally published author, and frequent speaker. He has been selected as a 2007, 2008 and 2009 Southern California Super Lawyer in the area of dispute resolution.