I’ve recently had the pleasure of participating in a new television series called “Cashed Out” on the Reelz channel. The show chronicles the lives, the deaths and the probate battles of celebrities including Michael Jackson, Prince, Amy Winehouse, Robin Williams, Johnny Carson and George Michael. Not too long ago I also wrote a book on the very same topic entitled Probate Wars of the Rich and Famous. Both the show and the book illustrate that many, dare I say most, families have issues, struggles and tensions–some of which are discussed, and some just smolder beneath the surface … until the death of our loved one. We hope to mourn those we’ve lost peacefully, but too often, hoping isn’t enough.
Not until it was too late did King Lear realize his plan for bequeathing England’s riches to only two of his three daughters was ill-conceived. Not until it was too late did Esau regret selling his birthright to his brother Jacob for a cup of hot soup. Themes of last minute changes to a will or deathbed gifts make for a fascinating read, or may play well in theaters near you, but such actions cause families to litigate as scores are arguably settled.
Take note, if any of the following variables are at play in your family, your legacy’s at risk:
- A second marriage with children from prior marriages;
- An elderly or infirmed widow or widower who changes the disposition of his or her wealth shortly before death;
- Significant wealth, a family business and a possible struggle for control;
- A dysfunctional family;
- A dilatory, tyrannical or conflicted fiduciary;
- An antagonist who is more concerned with his or her motives than the decedent’s intentions.
If any of these fact patterns exist and your estate plan was stale, ineffective, or non- existent, the estate will likely be contested. It’s almost a given, a universal truth, and this universal truth transcends time, knows no geographic border, and does not distinguish between rich or poor. When it comes to inheriting the family wealth, brush fires spread like a wildfire; treasures are reduced to ash; and it doesn’t take long for your legacy to go up in smoke. In the absence of such effective planning, here’s how the troubles start.
Trinkets, bric-a-brac, all the stuff accumulated during a lifetime often become the harbinger of things to come. Just one story for example; upon hearing that her mother passed, one daughter dropped everything, boarded a plane, and hours later, entered Mom’s home to discuss funeral arrangements with her sister. The good daughter was already there – organizing things. After a quick look around the home and a peek inside the mother’s china closet, and jewelry box, the questions started: “Where’s the candelabra and Grandma’s china, where’s Mom’s engagement ring?” “What do you mean?” responds the organizing daughter, “Mom gave me that stuff years ago. She said she wanted me to have it.”
The fuse is lit.
The visit may be brief, but the emails were long and emotionally charged. So whether the heirlooms are jewelry, candelabras, china or photo albums, do not leave the disposition of such possessions to chance. Most wills have a clause that governs the distribution of tangible personal property, and it is up to the executor to divide that property among the beneficiaries as equally as is practicable. When families are tight and get along well, this is usually not a problem. But when there’s friction, and all the heirs are not on the same page, this standard clause is an invitation for litigation. Accordingly, when drafting your Will, spend time documenting the distribution of your coveted treasures.
The lit fuse gets closer to the TNT if the family members differ on their respective ideas of; the funeral arrangements, the location of the burial, open or closed casket, or the wording of the obituary. Ted Williams’ head and body were separated, then cryonically frozen and suspended in biostatic chambers, as families member litigated over his burial instructions. To avoid such a chill, document your burial wishes.
But the coup de grace may occur if your heirs, after weeks of asking, discover the newly inked will, or a surprise codicil, or a new beneficiary designation form filed for your 401(k)—and, bang, the complaint gets filed. Allegations of promises made and promises broken are often lodged as a new lawyer enters the scene, and family members scramble to fight fire with fire. A caveat blocking the will from being admitted into probate may be filed, and the opposition files an show cause seeking to vacate the caveat—a five alarm fire. The lines are drawn, alliances formed and the best lawyers retained to:
- Set aside a will as the product of undue influence, fraud or lack of capacity;
- Set aside the titling of investment management accounts or deed;
- Set aside beneficiary forms for life insurance policies and retirement accounts;
- Enforce the rights of income beneficiaries or remainder persons of an estate or trust;
- Set aside the acts of the agent while supposedly authorized by a power of attorney;
- Demand an estate accounting and then object to the accounting when produced;
- Remove an executor or trustee for malfeasance or breach of fiduciary duty;
- Demand a sale or distribution of estate assets; and
- Appraise and properly distribute jewelry, photographs and the contents of the home.
Most petitions include an allegation that the you (the decedent) was subject to undue influence. Generally, courts have found that undue influence exists when circumstances show a destruction of your free will such that your judgment is overwhelmed by another, and consequently, in your weakened state, you, as testator, yield to the will of another merely for the sake of peace, and or that your mentally or morally coerced into doing something contrary to your own wishes. To establish undue influence, a contestant will typically need to establish that there were suspicious circumstances at the time the will was executed and that a confidential relationship existed between the you, the testator, and the beneficiary. Some states require the objecting party to show also that the influencer had both the opportunity and the motive to influence the testator. A confidential relationship may exist when circumstances make it clear that the parties do not deal on equal terms, that on one side there is an overpowering influence, and on the other, weakness, dependence, or trust such that the parties do not deal on terms of equality. Though varying from state to state, and court to court, the following factors are generally considered in determining whether undue influence exists and who has the burden of proving it:
- Whether the beneficiary was present at the execution of the will;
- Whether the beneficiary recommended and/or arranged for the attorney to draft a will for the testator;
- Whether the beneficiary, to the exclusion of others, reviewed drafts or provided comments prior to the will’s execution;
- Whether the beneficiary was involved with the decedent’s bankers, money managers, accountants, or lawyers shortly before the decedent’s demise;
- Whether the beneficiary was in charge of safekeeping the will subsequent to its execution;
- Whether the beneficiary secreted the will from others;
- Whether the beneficiary isolated the testator from other family members;
- Whether the beneficiary discouraged other family members from visiting the testator before his or her demise;
- Whether a beneficiary was the day-to-day caregiver;
- Whether assets were gifted or re-titled, or beneficiary forms changed shortly before the testator’s demise;
- Whether a long-term relationship with the family estate attorney was ended, and a new attorney hired shortly before testator’s death;
- Whether there was a history of a testator seeking to distribute assets equally, followed by actions that caused the estate to be distributed unequally;
- Whether the decedent’s health history indicates a mental or physical impairment;
- Whether the decedent was taking medication or required another to care for him; and
- Whether there were any suspicious acts that resulted in inequity.
If a court finds that a last will and testament offered for probate was indeed the product of undue influence, then it will be set aside, as if it never existed, and a prior will may be admitted to probate. A life’s journey, ending posthumously with a trial, subject to a discovery schedule, with expert reports, motion practice, briefs, mediation, and a trial, all seeking to find the truth, which now lies buried—a treasure never to be found, but instead judicially constructed. The antidote: estate planning. It’s all about you, your life and protecting your legacy. Documenting your wishes in a will, revocable trust, health care proxy, power of attorney, and, when appropriate, trusts will protect your family. Appoint executors, trustees and agents who have historically demonstrated characteristics such as fairness, reasonableness, and transparency and be sure they have a comfort level working with attorneys, accountants, financial planners and bankers. Share these documents and your thoughts with your accountant, financial planner, insurance professional, banker and estate planner. The estate planning process when implemented with a team of advisers, and kept current, may just protect your life’s work … and your legacy.
Russell J. Fishkind is a partner in Saul Ewing Arnstein & Lehr’s personal wealth, estates and trusts practice where he focuses his practice on high net worth estate planning, business succession planning, family office consulting, estate administration and probate litigation. He’s an associate adjunct professor at New York University, author of “Probate Wars of the Rich & Famous, An Insider’s Guide to Estate Planning and Probate Litigation;” author of “Legacy of a Lifetime, A Layman’s Guide to Understanding Estate Matters;” and co-author of Estate & Business Succession Planning…A Legal Guide To Wealth Transfer.”