People are greedy. It's human nature. Not all people are driven by greed but when the rewards of wealth are on the line, greed can have a way of bringing out the worst in people.
Greed is very often the underlying cause for disputes and litigation with respect to estate planning. Greedy family (including in-laws), friends and caretakers may attempt to take advantage of an individual with diminished capacity by unduly influencing how that individual chooses to transfer their wealth. Alternatively, family members and beneficiaries named in a will simply may not trust the person you name to manage your affairs. In this case, it is common for a beneficiary to think the person managing your affairs is making poor decisions, or worse, is or did unduly influence you. These greedy folks often ignite costly waves of litigation and ruin family bonds all of which weigh heavily on emotions, time and pocketbooks.
Defining undue influence is hard. In every long-standing relationship there is influence. Some people in a long-term committed relationship would even say that "compromise" is just another word for "undue influence". It is hard to say when a compromise or influence that is present in any relationship has crossed the line to undue influence. Nevertheless, "undue influence" is one basis for contesting an estate plan.
Undue influence usually takes place behind closed doors with no witnesses, which often makes proving the existence of undue influence difficult. Estate law seeks to give each person the right to transfer their wealth as they see fit. To this end, the law seeks to stay away from changing a person's will even if that person changed their will shortly before death.
This raises questions. Is a widowed father who reconnects with a former girlfriend after receiving a terminal prognosis, and changes his will shortly before death to disinherit his children in favor of the girlfriend, unduly influenced by the girlfriend? Or, did the girlfriend make the father happy at the end of his life? Similarly, is a daughter who is caring day-to-day for her mother exerting undue influence when she suggests that instead of payment, the mother do something for the daughter in her will? The daughter's out-of-state brother might think so.
Estate plans can be changed after an individual starts showing signs of diminished capacity. Signs of diminished capacity may even be the trigger that causes a client to prepare or update a dated estate plan. Individuals can minimize the risk of greedy folks causing problems in the event of diminished capacity by consulting with an attorney experienced in estate planning and by carefully choosing who will make medical and financial decisions on their behalf. A number of family disputes could be avoided by simply choosing an individual independent of the family to make medical and financial decisions.
Choosing a fiduciary
In estate planning, people tend to focus on the wealth they are giving away rather than who will manage that wealth during incapacity and who will be responsible for transferring that wealth after death. The person(s) or professional(s) named to perform these tasks are referred to as "fiduciaries".
No one likes to talk or think about becoming incapacitated or their own demise, which makes estate planning an easy task to place on the back burner. It usually takes the unexpected loss of a friend or family member, and ensuing chaos among their family, to create a sense of urgency around getting affairs in order. Even then, it is natural for individuals to shy away from issues that might upset family peace and harmony, or even insist that their children get along great. It is not uncommon, however, to discover that the children "get along great" during the few hours each year that they see each other at holiday dinners but do not speak to each other the rest of the year.
Every family has some level of dysfunction. Unfortunately, family dysfunction is a taboo topic and it can take months or even years for an individual to let their attorney into the family intrigues. Without knowledge of the fall out between Nancy and her step-son Tom or of the family relationships that pit sister Theresa against brother Brian, it is difficult for an individual to properly be advised as to who should be in charge of making decisions and managing property after death.
Choose fiduciaries carefully. Select a fiduciary who is honest and understands their obligations and tasks and who is unafraid to stand up to family members who may not agree with YOUR decisions. If there is distrust or strife between children, then a child is not the right choice to serve as a fiduciary.
A good attorney will push and prod an individual to talk about this trifecta of dreaded topics–family dynamics, incapacitation and demise. Only then can an experienced attorney put in place strategies and guardrails to make it more difficult for individuals to try to upset or change an estate plan.
Originally Published by Jones & Keller, January 2021
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.