In the past five years, I’ve noticed an acceleration of a trend that, in my opinion, is likely to result in an increase in the number of estates involved in litigation. I see an increase in the number of people who have been married more than once.
Estate litigation occurs when a potential heir of an estate challenges the deceased person’s last will and testament or a trust that the deceased person established. For instance, assume that Mrs. Smith has four children. If Mrs. Smith died without a Will, her estate would pass equally to her four children, the heirs of her estate. But let’s assume that Mrs. Smith drafted a Will naming only three of her children as beneficiaries of estate and disinheriting one of her children. The child who was disinherited is a potential heir of Mrs. Smith’s estate but not a beneficiary of her estate because Mrs. Smith’s Will disinherits the child. The disinherited child could file a lawsuit in court challenging Mrs. Smith’s Will as being the product of undue influence or mental incapacity.
Many of my clients are under the impression that if a lawyer drafts a Will the Will cannot be challenged. This is untrue. While there are steps an attorney can take to minimize the potential success of an estate litigation, a potential heir can always file a lawsuit challenging the Will. So, while the disinherited son may ultimately be unsuccessful in his Will-challenge, he has every right to file the lawsuit and tie the estate up in litigation for years. Ironically, in many cases, the estate will pay the legal bills of the disinherited child, so to some extent, it’s a no-lose proposition for the child challenging the Will and a no-win proposition for the three beneficiaries of Mrs. Smith’s estate.
Second (or third marriages) are, in my opinion, fertile ground for estate litigation, and I am seeing more and more second marriages. I’ve been concentrating my practice in elder law for twenty-one years now. When I first started practicing, most of my clients were born between 1910 and 1920. Several years later, most of the clients were born between 1920 and 1930. Then 1930 to 1940. And now, many are born after 1940. With the generational change in my clients, I see a definite change in social mores.
For the first ten years of my practice, few, if any, clients were in a second marriage. Then some of my clients were in a second marriage. Now, a significant portion of my clients are in a second marriage. While it is nice that people found happiness, the happiness they’ve found can definitely come with legal issues that many people believe won’t apply to them.
Let’s assume that Mr. and Mrs. Jones come to see me. Both have two children from first marriages and no children in common. I ask them what they want to say in their Wills. “We want everything to go to the survivor of the two of us then to our four children equally.” I inform the Joneses that if Mr. Jones were to die and leave his entire estate to Mrs. Jones, all the property would be Mrs. Jones’s to do with as she pleases. She could change her Will at any time after the death of Mr. Jones and disinherit his children. “This will never happen,” my clients say to me in unison. “We aren’t worried about that.”
Then Mr. Jones dies, and Mrs. Jones comes to my office telling me how Mr. Jones’s children didn’t come to his funeral or snubbed her in some way. They’re out of the Will.
Curing this potential issue isn’t easy though. If the Joneses were concerned about the survivor changing his or her Will, they’d have to divide their assets between the two of the them so that each spouse literally owned half the assets (or his/her assets) in his/her name alone then establish a trust for the surviving spouse in the Will.
And who will be the trustee of the trust for the surviving spouse? The surviving spouse? One of the children of the deceased spouse? A combination of the two? Each of these “solutions” has its own problems. If the spouse is the trustee, what is to stop her from using all the money in the trust? If one of Mr. Jones’s children is the trustee, what’s to prevent the child from being extremely frugal with the amount of the money in the trust he uses for his stepmom’s benefit. If the spouse and a child are co-trustees, what’s to prevent them from fighting so that no disbursements from the trust occur?
There is no easy answer. There are options. Certainly no one-size-fits-all option, and no option that guarantees a smooth transfer of wealth.