What is Probate Litigation?

Probate is the legal process of transferring property after a person passes. This process is designed to distribute the possessions of a deceased person who may have passed without a will or any other type of estate planning put in place. While it may seem like creating a will or living trust is something that most people do before they pass on, in reality, the majority of estates in the US will end up going through the probate process.

However, even when you take the time to create a valid will, the probate court will still need to distribute your assets as outlined in the will. In these cases, most of the time the distribution of assets is handled easily and without conflict. But other times a legal contest may arise, leading to probate litigation.

Probate litigation refers to a lawsuit filed by a probate attorney when there is a dispute over a will or in other instances including:

• A person named in the will can no longer manage their affairs or they have become incapacitated.
• The person(s) named in the will requires a guardian or conservator.
• There is a dispute regarding who should act as a guardian or conservator.
• Someone is suspected of abusing their role as a guardian or conservator.
• And more

Additionally, probate litigation may be necessary if a fiduciary or power of attorney is suspected of any misconduct.

What Happens in Probate?

When an estate goes to probate it is either contested or uncontested. Typically, contested issues arise during the probate process due to the fact that an heir is seeking a larger share of the property than they received. Some of the reasons that one might contest a will also include:

• It is believed that someone had undue influence over the decedent
• A failure of formality in which the validity of the will comes in to question
• Or due to mental incapacity if it is believed that the decedent was not of sound mind when creating their will.

However, the majority of probated estates go uncontested. If the estate is uncontested, it will go through a basic process including:

• Collecting the probate property of the decedent
• Pay any debts, claims and taxes that are owed by the estate
• Collecting rights to income and dividends
• Settling any disputes
• Distributing any remaining property to all heirs

It is common practice for people to name an executor to manage their affairs once they’ve passed on. But if you fail to name an executor the court will then appoint a personal representative or administrator to take over the settlement of your estate.

Put Your Trust in the Probate Attorneys at France Law Firm

The skilled and knowledgeable team at France Law Firm can help you plan for your loved ones after your passing or offer you guidance during the probate process when you need it. By ensuring that your personal affairs are in order before you’re gone, you can help save your loved ones from the stress and worry that comes with contesting a will. Additionally, when your future is at stake, working with a confident and experienced probate attorney is the best way to make sure your case is handled properly. Visit us online today to schedule an initial consultation.

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Dysfunctional Families

The term dysfunctional family is often used by lawyers who handle probate litigation (one of my former law partners liked to explain his practice by saying he represents “dysfunctional families with wealth”). By definition, a family involves multiple people who have wants and needs and must interact with each other. It is easy for dysfunction to arise in families, especially if resources must be shared. Family relationships can be very rewarding, but they also can be very hard. It appears that many misunderstandings arise because of the fact that people do not always communicate clearly with each other, leading to unresolved issues. Sometimes it is just too painful for people to address issues that really should be addressed. Estate planning lawyers are not psychologists, but they understand the difficult situations some people are in. They are able to help clients deal with difficult issues in a proactive way: “An ounce of prevention is worth a pound of cure.” This is particularly true when it comes to avoiding probate litigation. Some people say they do not care what happens after they are dead. But, if there is probate litigation after death, even the decedent’s favored beneficiaries suffer. Good planning is the answer.

Factors That Could Lead to Probate Litigation
Here is a list of some of the factors (in no particular order) involved in probate litigation, grouped by categories.

Creating a “Nonstandard” Estate Plan
Some examples included estate plans that (1) “cut out” a child, (2) treat children differently, (3) create overly detailed trusts attempting to “control from the grave,” and (4) make gifts to mistresses. It does not matter if the person creating the plan has “good reasons” for doing what he is doing. A nonstandard estate plan increases the odds for probate litigation after death. It’s just a fact.

Other Difficult Situations
Other situations that are always more difficult to plan for and that increase the need for solid planning to avoid probate litigation (and other problems) include (1) heterosexuals living together who have not executed a “non-marital cohabitation agreement” to avoid a “common law spouse” lawsuit on death; (2) gay and lesbian couples who do not do “special additional planning” to place their partners in a secure position of control (to override state law priority statutes) and to arrange for the unassailable transfer of assets to their partners on death (tax planning also can be harder because the estate tax marital deduction is not available to gay and lesbian couples); (3) making unreported “taxable gifts” during life (a taxable gift is a gift that is more than $12,000 per person per year (the current annual exclusion amount)); (4) making gifts during life to just one child and not to all children in equal amounts; (5) failing to tell the estate planning attorney about an illegitimate child or child from a prior marriage; and (6) failing to organize the client’s financial and other important information to enable the executor of the estate to do a good job.

Failure to Follow Up
This category includes the client (1) failing to review the estate plan on a periodic basis (estate plans become outdated very quickly now); (2) failing to do the necessary “homework” incident to the estate plan (such as retitling accounts and completing beneficiary designation forms as instructed so that non-probate assets are coordinated with the client’s estate plan in his will or trust); (3) failing to change the will, account titles, and beneficiary designations after marriage or divorce; and (4) failing to retitle all the assets in the name of the living trust before death if the intention is to avoid probate completely.

How to Avoid Probate Litigation
Don’t do things that could cause serious legal consequences without first discussing them with legal or other advisors. Come in for a “check up” on a regular basis and be prepared to discuss every issue and concern. Follow through on necessary “homework” such as account titling and beneficiary designation matters (see above). Plan ahead for possible mental incapacity by having the appropriate documents in place. Make sure the persons appointed to fiduciary positions are completely trustworthy and responsible.

If a nonstandard estate plan is being implemented, use stronger techniques (such as a funded living trust) and additional provisions (such as a “no contest” clause). Consider creating a “will wall”: a series of wills executed over a lengthy period of time, designed to make it undesirable for a relative who the client wishes to “cut out” (or treat less favorably) to contest the will, so that if the last will is successfully contested, the contestant will still have to contest the prior will, which, through advance planning, would have been prepared to provide even less generous gifts to the contestant than the last will (and so on).

In discussions with family members, the client should explain the reasons for the plan being implemented, although the client will need to be careful to state the reasons in a way that is calm and rational (“incendiary” statements will only add fuel to the fire and could be detrimental in a will contest).

Not all probate litigation can be prevented, of course, but a large portion of probate litigation can be prevented by good planning. Good planning is what estate planning is all about.

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“Contested matters” handled by probate courts (aka “probate court litigation”) is a broad term that includes a variety of situations, including, but not limited to:

• Will contests (a challenge to the validity of a will);
• Will and trust construction suites (a request that the court make a determination regarding the legal meaning or effect of particular wording used in a will or trust);
• Guardianship contests (a fight over (1) whether a guardian should be appointed for a particular individual who allegedly who allegedly lost his or her mental capacity and did not do any advance planning, such as executing powers of attorney), and (2) if so, who should be appointed as the guardian to make medical decisions and handle financial matters for that mentally incapacitated person);
• Trust modification and trust reformation suits (a proceeding that requests the court to change or “fix” the terms of a trust because something is wrong with the way the trust is worded;
• Trust termination suits (a legal action brought to terminate a trust because the purpose of the trust has been fulfilled or can no longer be fulfilled); and
• Breach of fiduciary duty actions (suits by beneficiaries against an executor, trustee, guardian, or agent alleging that the fiduciary failed to act in accordance with the law and/or the instrument appointing her and thereby caused damage to the beneficiaries).

Multiple Marriages
Besides sibling rivalry, another high-risk factor for probate litigation is the so-called “second marriage” situation. Many people marry for a second (or even third or fourth) time without signing a premarital agreement (pre-nup) before the wedding. Many people, including the media, still mistakenly believe that the sole purpose of a pre-nup is to specify how their assets will be divided on divorce. Although such matters can be addressed in a pre-nup, estate planning lawyers are more concerned with the “messy issues” that develop on death (they have an optimistic attitude that their clients’ marriages will work out; they have a pessimistic attitude when it comes to death, however—all of their clients will die someday). The pre-nup is one of the best ways to avoid probate litigation on death. It can also avoid a very expensive “forensic accounting” on the death of the first spouse. Many people mistakenly believe they own certain assets as their separate property (perhaps simply because the asset was in existence before the marriage and/or is titled solely in their name) when, in fact, their property may have become community or marital property, in whole or in part, during the marriage. It is better for living persons to create the necessary documentation regarding the ownership of their assets, even if it involves a pre- or post marital agreement, than to have family members fight over these matters on the death of their spouse or parent. Not to be too harsh, but it appears irresponsible (and, perhaps, also “penny wise and dollar foolish”) for persons who own any significant assets to enter into a second marriage without a pre-nup. Even if the spouses in a second marriage are themselves happy to treat all assets on hand on the death of the first spouse as joint or community property, unless the proper legal documentation is in place, there is nothing to prevent one or more children of the deceased spouse from claiming otherwise after the death of their parent. This is the classic probate court litigation case: children of the first marriage versus the spouse of the second marriage.

Keep an eye out for the second part of our series about probate litigation, and all that it entails! If you have any questions regarding probate litigation, contact France Law Firm today!

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