Common Causes of Estate Litigation – Part II
In considering causes of estate litigation sometimes you need not look further than to your extended family if the relationships within the extended family are acrimonious.
An extended family can include a spouse, former spouse whether legal or common-law, children and their respective spouses (and former spouses), grandchildren and their spouses (and former spouses), siblings, nieces and nephews, extra-marital partners and other dependents, whether related to you or not. It is possible that any one of the above-noted people might bring a claim against the estate, or raise a dispute. Jealousy amongst family members and/or the anticipation or expectation that they are to or will receive all or a portion of the estate, however unwarranted, may lead to family members taking unreasonable positions with respect to claims they feel they have against the estate.
In making an estate plan then, it is critical to have any and all agreements that may affect your estate plan prepared before you die. These agreements could include separation, marriage, co-habitation, partnership, employment and shareholders agreements depending on the nature and make up of your estate.
While the secrets one has from a family may be extremely touchy, emotional or just difficult to disclose or deal with, their disclosure following death may lead to demands against the estate. An extra-marital relationship, an illness of whatever kind not known to the family, a relationship with a caregiver or promises made to caregivers regarding their compensation can be examples of such secrets. For instance, a friend or family member may be assisting with one’s errands or day to day care. If promises are made to the family friend or relative that they will be “looked after” upon one’s death, then they may make a claim against your estate following your death if their relationship with you and/or compensation is not clearly known.
The nature of your assets and the manner in which you deal with them while you are alive can lead to problems following your death. For instance, you may have an asset that can be designated to a certain beneficiary such as an RSP, insurance proceeds or a pension. If the intended beneficiary has passed away or alternatively, your family circumstances have changed such that you no longer intend for that beneficiary to be the designated beneficiary, upon your death a dispute may arise.
Another example might be where the major assets in the estate are real estate. The beneficiaries of those assets might well get into an unnecessary argument over the handling of such assets if there is not enough cash to pay for the liabilities (i.e. taxes, expenses) that might arise upon death. This circumstance could be avoided with the purchase of sufficient life insurance to cover these liabilities upon death.
Your choice of a personal representative for your estate should also be given serious consideration. The beneficiaries of your estate will no doubt be critical of the executor and trustee appointed under your Will if the executor and trustee are perceived to be biased to certain family members.
The causes of estate litigation discussed in yesterday’s and today’s blogs are not an exhaustive list. The causes discussed are not in and of themselves a legal basis to make a claim against the estate. Having said that, if one does not have a well planned estate plan, the causes discussed can often lead to family members or others who believe that they deserve or are entitled to a portion of the estate to look for a basis upon which to challenge your Will or bring a claim against the estate for dependent’s relief under the Family Law Act, breach of contract or perhaps constructive trust.
Have a great day.