How to avoid family litigation after you die
It may seem illogical to pose the question: “How to avoid family litigation after you die?” given the obvious: you’re dead. However, after you are gone, family members can end up fighting over money and squabbling over what they feel they are entitled to, which can often lead to a legal battle in order to attain what is desired (which may not be the object at all). Some legal fights involve a dispute over the contents or legitimacy of a will, or the appointment of an executor or the selection of an attorney for property and personal care (if your capacity is an issue). The simple answer to the question of avoiding litigation is to prepare ahead. All too often people either inadequately prepare their estate plan or fail to prepare one at all. There are four key ways to avoid costly litigation surrounding estate disputes.
First and foremost, hire an expert
When drafting your will or power of attorney, be sure to consult a lawyer who practices primarily in wills and estates. It’s relatively common for people to consult their company lawyer or real estate lawyer to draft testamentary documents, but this can become problematic in the future. Consulting your company lawyer may save you money and time upfront but don’t forget, you get what you pay for. Cutting corners when drafting your will can result in ambiguities and loop holes concerning the contents of your will. If you fail to eliminate such problems, it can result in deficiencies in the document, which are prone to familial dispute.
Have a family meeting
You can manage the risk of litigation and mitigate damages of your estate by simply communicating with your family. Discussing your will and the distributions therein with your family is not easy, nor is it pleasant. However, making your family aware of your intentions and desires can help reduce and perhaps eliminate any future squabbling about your estate. The same applies to your appointments in a power of attorney. Making your family aware of why you selected one person over another to act as attorney over your personal property when you become incapable can add perspective and insight surrounding your decision. Outlining your choices and selections to your family members while you are still alive and have the mental capacity to do so can help prevent and avoid familial court disputes in the years to come. This level of transparency aids in the avoidance of surprises and misunderstandings and will reduce the risk of litigation in the future. At the very least, it is good evidence in court about why your choice should be adhered to by a judge!
Consider gifting while alive
The key motivating factor behind estate disputes is the idea of a perceived wrong. Leaving an asset to a specific child over another may cause conflict if the other child is emotionally attached to that asset and therefore expecting to receive it. Inter vivos gifting (gifting while alive) can eliminate such disputes by taking into account all your assets and the emotional connection some family members may have to them. Gifting certain assets and particularly, family heirlooms, as opposed to leaving them in your will or in the residue of your estate, allows you to not only communicate your intentions to family members but execute on them.
Appoint an executor
Being named as an executor of an estate is no simple task and more often than not, a chosen executor opts out of the role. Why? Because it’s tangled with liability. The role of an executor is not to be taken lightly. An executor is a fiduciary and has many obligations and duties. Appointing a family member (who has conflict with other family members) or someone who does not share your value system can lead to tension or ill feelings between family members. It may also lead to errors and oversights in the administration of your estate. When selecting an executor, always choose someone you trust. That person can be a friend or family member. One way to avoid conflict is through the appointment of a trust company. Such appointment depends on the size of your estate but it is an attractive option to help avoid family and legal conflict.