Preventing Family Conflict and Disputes Over Your Estate Plan
No matter how well you know your loved ones, it’s impossible to predict how they’ll behave when you die or if you become incapacitated. No one wants to believe that their relatives would end up fighting one another in court over inheritance issues … but it does happen all the time.
Family dynamics are complicated and prone to conflict even during the best of times. But when tragedy strikes, even minor tensions and disagreements can explode into bitter conflict. And when access to money is on the line, conflicts can heat up — fast.
You can dramatically reduce the chances for conflict by working with an experienced lawyer who understands, and can anticipate these dynamics. Preventing family conflict is one of the primary reasons to work with a Personal Family Lawyer®, rather than relying on do-it-yourself estate planning documents you’ve downloaded from the internet. Even the best documents will be unable to anticipate and navigate such complex matters and directly apply to your specific family situation — but I can.
Yes, it is impossible to predict how your loved ones will react to your estate plan. But I do know that poor fiduciary selection ranks high among the most common drivers of conflict. Let’s explore the importance of selecting a competent fiduciary in more detail.
When the person you’ve chosen to handle your affairs fails to properly carry out his or her responsibilities, it’s a recipe for disaster. These roles — like power-of-attorney agent, executor, or trustee — entail a variety of duties and some of the responsibilities of management will last for years.
The person you select, known as a fiduciary, is legally required to execute those duties and act in the best interests of your beneficiaries. Failure to do so — whether on purpose or unintentionally — is a breach of fiduciary duty which can cause serious conflict between your loved ones.
Common breaches include failing to provide required accounting and tax information to beneficiaries, misusing using estate or trust assets for personal benefit, making improper distributions, or failing to pay taxes, debts, and expenses.
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.
Given the immense responsibilities involved, you must be extremely careful when selecting fiduciaries. 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 well. Only choose the most honest, trustworthy, and diligent individuals, and be careful not to select anyone who might have conflicts of interest with beneficiaries.
It’s also crucial that your estate plan contains clear terms spelling out a fiduciary’s responsibilities and duties, so they understand exactly what’s expected. Should things go awry, you can add terms to your plan that allow beneficiaries to remove and replace a fiduciary without going to court.
You don’t have to navigate this significant decision alone.
I Can Help.
If you are trying to decide whether the many benefits of using trust-based estate planning will work for you and your family, set up an appointment with me so we can design a plan that will provide you with the right solution and will work when you need it. You want a plan that will provide the maximum benefit for the people you love most while paying the least amount of taxes possible.
