Preventing Family Conflict and Disputes Over Your Estate Plan
No matter how well you think you know your loved ones, it’s impossible to predict exactly how they’ll behave when you die or if you become incapacitated. No one wants to believe that their family members would ever end up fighting one another in court over inheritance issues or a loved one’s life-saving medical treatment, but the fact is, we see it all the time.
Family dynamics are extremely complicated and prone to conflict even during the best of times. But when tragedy strikes a member of the household, even minor tensions and disagreements can explode into bitter conflict. And when access to money (or even quite often, sentimental items of furniture or jewelry) is on the line, the potential for discord is exponentially increased. Ultimately, there is no greater cost to families than the cost of lost relationships after the death or incapacity of a loved one.
The good news is you can dramatically reduce the chances for conflict in your family by working with an experienced estate planning lawyer, who understands and can anticipate these dynamics. In fact, preventing family conflict is one of the primary reasons to work with us, as your Personal Family Lawyer®, to create your estate plan, rather than relying on do-it-yourself estate planning documents. After all, even the best set of documents will be unable to anticipate and navigate such complex emotional matters—but we can.
By becoming aware of some of the leading causes of conflict over your estate plan, you’re in a better position to prevent those situations through effective planning. Though it’s impossible to predict how your loved ones will react to your estate plan, the following issues are among the most common catalysts for conflict.
Poor Fiduciary Selection
Many estate planning disputes occur when a person you’ve chosen to handle your affairs following your death or incapacity fails to properly carry out his or her responsibilities. Whether it’s as your power of attorney agent, executor, or trustee, these roles can entail a variety of different duties, some of which can last for years.
The individual you select, known as a fiduciary, is legally required to execute those duties and act in the best interests of the beneficiaries named in your plan. The failure to do either of those things is referred to as a breach of fiduciary duty.
The breach can be the result of the person’s deliberate action, or it could be something they do unintentionally by mistake. Either way, a breach—or even the perception of one—can cause real and understandable conflict between your loved ones. This is especially true if the fiduciary attempts to use the position for personal gain, or if the improper actions negatively impact the beneficiaries.
Common breaches include failing to provide required accounting and tax information to beneficiaries, improperly using estate or trust assets for the fiduciary’s personal benefit, making improper distributions, and failing to pay taxes, debts, and expenses owed by the estate or trust.
If a suspected breach occurs, beneficiaries can sue to have the fiduciary removed, recover any damages they incurred, and even recover punitive damages if the breach was committed out of malice or fraud.
Solution: Given the potentially immense responsibilities involved, you must be extremely careful when selecting your fiduciaries, and make sure everyone in your family knows why you chose the person you did, and that the person you choose knows how to do the job—and do it well. You should only choose the most honest, trustworthy, and diligent individuals, and be careful not to select those who might have potential conflicts of interest with beneficiaries.