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There Has To Be A Better Way: The Value in Managing Estates Conflicts

by Paul Fisher, Edited by Judith Stalk

In a contested estate matter, the financial, emotional and time cost to parties can be devastating. Probate court litigation destroys families, something the trustor never intended.

What is the financial, emotional and time cost to parties involved in estates litigation? This is an essential question in determining the value of “a better way” to handle these conflicts.

What is the financial impact of estates litigation on the parties?

When asked to assess the financial impact on those involved in a contested estate case, attorneys in Estate Conflict Management workshops respond that it depends on a number of factors – the size of estate in dispute, the number of combatants, and the level of emotion driving the litigation engine, and the attorney.

At the low end, attorneys in Riverside County indicate a minimum of $10,000 per party. In San Diego County, estimates range from $75,000 to $150,000 before trial. In San Mateo County, estimates range anywhere from $100,000 to $1,000,000. One attorney reported a Contra Costa County case with fees of $550,000 incurred by a trust valued at $1,000,000. After eight years of litigation, no distributions have been made. In Long Beach, an attorney indicates his firm represented 9 of 13 children challenging a trust. With document production, depositions and a five-day trial, attorneys’ fees amounted to $200,000 on an estate valued at $500,000.

Attorney fees and costs in any litigation are often referred to as “punishing”, and that is frequently the goal. In estates litigation, attorney fees may be “payback” to the parties who do indescribable and vengeful things to each other. It is part of the price paid for waging war.

What is the emotional impact of estates litigation on the parties?

In San Bernardino County, attorneys reported that often relationships are totally destroyed due to “scorched earth” litigation. Sometimes, physical violence among family members requires restraining orders. Judge Ludvigsen, one of the two judges who hear all probate cases in that County, said “These cases destroy families.”

A Santa Rosa County attorney stunned workshop participants with his case in which the family will lose land it has held since the early 1800s due to the dysfunctional family dynamic. The family will be destroyed and there will be no relationships left.

In Los Angeles, an attorney points out that litigation ages the client and even the attorney. Her clients can’t sleep at night; their every pain is exacerbated. She is stressed because she can’t get her client out of the conflict. Another participant commented, “It becomes scorched earth when people have such strong emotional issues that the money becomes irrelevant. They have the sense they are not writing the checks.” Another T&E attorney comments, “Sometimes the wacko party finds an even wackier lawyer.”

How long does it take for estates cases to wend their way through the court process?

One to two years is the general consensus in California; however, many brutal exceptions are reported. In Los Angeles’ South Bay area, a case can take five years including appeals. In San Mateo County, there’s report of a case that has been festering for 20 years and family communication is nil. In the Northern California city of Santa Rosa, an attorney flabbergasted sophisticated workshop participants when he described his languishing case in which the decedent died in 1983. The case had been up on appeal four times, attorneys’ fees to the estate had climbed to $1,800,000, and no distributions have been made.

What are the messages?

When it comes to fighting over family money, rational people become irrational. Says one attorney, “Money does strange things to people, especially when it’s not their money, or they imagine that it should belong to them. People go nuts.” An attorney in the South Bay area reports that one client told her, “I’d rather pay you $20,000 than pay my sister $20,000 to go away. I don’t want her to get anything. That’s what Dad wanted.”

Another South Bay attorney points out that in 90% of disputed cases there is a “wacko” and you can’t find an exit strategy. Expanding on this, he says,” I see more ‘dark’ emotions in trusts and estates disputes between siblings, or children of current and prior relationships than I ever see in divorce cases. When someone dies, it’s like shaking a bottle of champagne and popping the cork. All these negative emotions fizz up to the surface.”

Some family members hate each other, and will never speak with each other for the rest of their lives. Some will never forgive each other. “It’s irretrievable. The family gets stuck on issues from childhood. It is devastating. It destroys relationships.”

Riverside County Commissioner Paulette Barkely who hears all probate and estates cases in that county, comments that families become alienated from each other. Brothers and sisters never speak to each other. Children never see their cousins. “This litigation results in a destruction of the whole family, something that the trustor never intended.” A Santa Rosa attorney comments “When they file suit they justify it with a need for vindication for past childhood sibling conflicts, or a need to honor what they believe their parents wanted. The truth is, when they file suit they send a statement that the family has no value.”

Parties to estates litigation become refugees in the very war they have created. Not only do they become separated from their family they grew up with, they may never see them again. A West Los Angeles attorney observed “You’re better off dying broke to hold the family together. It’s worse than family law.” A Long Beach attorney commented “In my office we pass these cases on to our children”.

And finally, an attorney in the San Fernando Valley said, “If my client tells me they want to contest a will or trust, in order to discourage them I tell them ‘You will spend five to six figures, and your family will never speak to you again. Before you get started you must say to yourself if that ‘that’s ok’”.

A CPA wealth manager in the South Bay summed it up. “The bottom line is estates litigation makes no business sense.”

As I write this now, I wonder if, as a co-trustee of my father’s estate filing suit against my co-trustee brothers, I was sending the message that I didn’t value our family. That never occurred to me. At the time I felt I was carrying out my father’s wishes. The unintended impact of the ensuing litigation was the absolute destruction of the relationship between me and my two brothers and nieces. To this day, I am deeply troubled, and wish we had found a better way.

Next in the series: During the estate planning process, if conflicts are anticipated, what are the choices as to when to address them? What are the benefits, if any, of addressing these issues during the estate planning process?

To read the introductory chapter in this series, click here.