During the estate planning process, most people are focused on making decisions that will cause the least amount of conflict after their death. The reality is that family dynamics are incredibly complicated, and when an individual is dealing with grief in the face of an estate plan they disagree with, conflict may arise.
In this article, we discuss five things you can do to (hopefully) avoid future litigation involving your estate.
1. Leave A Validly Executed Will
Although estates involving a professionally drafted will are frequently litigated, homemade wills and handwritten “holograph” wills are generally a recipe for protracted litigation and should be avoided if at all possible.
Having a will drafted by a lawyer and witnessed by a neutral party means that there is a paper trail available to scrutinize why certain estate planning decisions were made. This also reduces the risk of the errors commonly found in homemade wills.
2. Document Joint Property Ownership Carefully
One frequently litigated issue in estates involves real property or bank accounts that have been transferred from a parent into joint ownership with an adult child. This is often a problem when the property is only transferred to one of several children, and the parent does not discuss why this transfer was done with all of their children.
If you are considering transferring property into joint ownership to avoid probate, or for some other reason, this transfer should be carefully documented as to whether this is being made as a gift to the one child, or if the child is simply holding the property in trust for the estate. As well, it is a good idea to inform all of the children involved so this is not a surprise on your death.
3. Choose Estate Trustees Wisely
If an individual has children, it is a common concern that they do not want to be seen as picking favourites when selecting an executor for their will. This causes many people to appoint joint executors so as to not leave anyone out.
Joint decision making is difficult even in the best of sibling relationships. While appointing a sole executor does not guarantee the avoidance of litigation, it may be the right decision if there is any potential for the executors to disagree or for a conflict to arise. Some tips in selecting an executor include:
- Choose an executor who is organized and has demonstrated fiscal responsibility.
- Consider whether you should use the services of a trust company instead.
- Remind your executor that they can always retain the services of a lawyer to assist in the estate administration process.
- Discuss with your loved ones why you selected the executor that you did, and remind them that being an executor is a significant amount of work that they should be thankful not to have to undertake.
4. Address Capacity Issues Proactively
Lack of capacity is by far the most frequently litigated issue in estates. This issue is especially important when an individual is cutting someone out of their will, or making significant estate planning changes suddenly.
If you are assisting an aging parent and have any concerns that they may no longer have capacity to execute a will, or if capacity may be raised as an issue later on, discuss this with the lawyer involved with the estate planning process.
A capacity assessment may be able to be done in order to determine capacity and how best to proceed.
5. Discuss Your Estate Plans Openly
Many people are superstitious when it comes to estate planning or uncomfortable talking about their decisions with their loved ones. However, being open and honest about what estate planning decisions you have made, what assets and liabilities exist, and how things will unfold after your death is an important step in avoiding conflict.
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If you have concerns about your estate being litigated in the future, or require assistance in commencing or defending against litigation, please contact me to learn more about how our firm can assist. Thanks for reading.
Mark Lahn