Why Would A Person Choose To Establish Irrevocable Trust?

Once an irrevocable trust has been finalized it cannot be terminated, whether that occurs upon the grantor’s death or during their life. Set up with the help of a trust and probate attorney, trust account rules state that once property is placed into an irrevocable trust account it cannot be retrieved by the grantor.

A revocable trust offers some of the best flexibility for trust administration, allowing people to make changes and amendments as necessary throughout the duration of the trust. Why, then, would someone choose to establish an irrevocable trust, which has much more stringent rules?

There are a few benefits to selecting an irrevocable trust. One property is in an irrevocable trust it is no longer part of the grantor’s estate, so this trust administration setup can actually reduce taxes as it reduces the overall estate value. Because the assets essentially belong to the trust, not the grantor, it will not be subject to taxation.

There is also something to consider when it comes to trust and probate — an irrevocable trust is one way to potentially avoid the probate process.

Using an attorney with trust account rules knowledge you can also use irrevocable trusts to set up long-term plans. If you want to ensure continued support for someone, or protect assets into the future, an irrevocable trust is a way to set up an extended payment schedule or protect property from creditors. An attorney experienced in trust administration can guide you through the decision-making process, if you are considering an irrevocable trust for these reasons or similar factors.

To set up an irrevocable trust you certainly need to have confidence in your situation, your attorney, and the person you have selected to be your trustee, as you cannot easily regain control over an irrevocable trust once it is finalized.

Because of this, it is important to select a qualified and competent trust and probate attorney who can help you explore the pros and cons of irrevocable trusts versus revocable trusts, or other trust administration options. You most certainly will want to have all of the details possible when making this type of financial decision, especially if you go down the path of selecting an irrevocable trust to manage your assets. There are many reasons to do so, but you should be fully informed.

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New Perils of Arizona Beneficiary Deeds

I first wrote about using an Arizona beneficiary deed to avoid probate on November 13, 2012.

A recent decision of the Ninth Circuit Bankruptcy Appellate Panel reveals a major shortcoming that should affect the popularity of beneficiary deeds.  In Jones v. Mullen, BAP No. AZ-12-1644-DPaKu, the panel decided that the debtor’s interest in real property acquired because of the death of his grandmother 3 days after the debtor filed a Chapter 7 bankruptcy petition was property of the bankruptcy estate.  The bankruptcy trustee was allowed to sell the debtor’s post-petition acquired interest in the real property.  The debtor’s creditors benefited from the decedent’s beneficiary deed rather than the intended grantee, the decedent’s grandson.

Beneficiary deeds have become so popular and widely available on the internet, many people create beneficiary deeds without consulting a lawyer or otherwise gaining an appreciation for some of the more common pitfalls.  Leaving property outright to an intended beneficiary heads the list of problems that can be avoided with planning.  This mistake could be made in a Will or a trust as well as a beneficiary deed, but most trusts and many Wills are prepared by lawyers who have the opportunity to counsel their clients and discover whether or not special circumstances exist which suggest adoption of a different plan.

Bankruptcy laws can disrupt an estate plan and cause a detrimental unintended consequence.  A well constructed estate plan considers potential obstacles such as unforeseen bankruptcy filings and poor timing and “plans” for such possibilities in ways that a beneficiary deed form cannot.

Interestingly, in Jones, the decision did not rely on the 180 day clawback rule of §541(a)(5) for inheritances, but rather reconfirmed a 24 year old case, Neuton v. B. Danning (In re Neuton), 922 F.2d 1379 (9th Cir. 1990), decided using §541(a)(1).  The controlling law in the Ninth Circuit is that a contingent interest becomes property of the bankruptcy estate upon the filing of a petition, subject to divestiture and valuation issues.  Here, when the contingency occurred, Grandma’s death, during the pendency of the bankruptcy case, the debtor was left with no recourse and the interest was sold for the benefit of the bankruptcy estate and the debtor’s creditors.

The Ninth Circuit consists of California, Oregon, Washington, Nevada, Hawaii, Alaska, Montana, Idaho and Arizona.  The result could be different in other states that don’t have the same precedent.

The Jones case is a perfect example of the old adage “that for the want of a nail, the horse was lost.”  Although a beneficiary deed may be inexpensive to create and avoids probate, it also contains none of the protections many folks want for their descendants.  If any adverse conditions exist on the date of death, the decedent’s estate plan will be frustrated.

This is just one example of how beneficiary deeds may be innocently misused.  Failure to adequately identify who takes the property if the originally named beneficiary fails to survive the grantor is another common mistake that can be avoided with careful planning and competent drafting.

In the proper circumstances, a beneficiary deed can be a time and money saving alternative to probate, but unforeseen consequences can assure that the simple idea is not a good one.  Before using a beneficiary deed, make sure you have identified not only the benefits you desire, but the risks and pitfalls not often discussed.  I can help you analyze whether a beneficiary deed is a good solution for you.  For this or any other estate planning concern, call me today.

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What Is Probate?

Probate  is the court process by which a Last Will and Testament is proved valid or invalid. Its name is derived from a Latin root word that means “the truth.”  It is also the legal process whereby assets of a decedent are administered.  “Administration” means finding, collecting, and distributing assets in kind or after liquidation and payment of the decedent’s debts and the administrative expenses incurred performing those acts.  A probate case is also the process whereby the distribute-es of the decedent’s assets are determined and the creditor claims are examined.

Probate is not required in every case and the kind of assets owned by a decedent and how those assets are titled will determine if a court proceeding is necessary or not.  I am best known for creating estate plans using trusts that help families avoid estate taxes and probate, but my staff and I are also experienced at helping families determine if a probate case is necessary and to help families transition assets with as little anxiety and expense as possible.

Contrary to popular belief, the value of the assets is not the primary factor in determining if a probate case is necessary.  Some very small estates must be probated and many high value estates avoid probate.  Probate is a different issue than whether an estate tax return is required.  We will help you make an initial determination as to both issues.

The key factor for probate is whether or not the decedent would have had to sign a legal document to transfer the asset.  Common assets falling into this category are houses, bank accounts, vehicles, and business interests for which no alternate method of transfer has been pre-arranged.  We can assist you in pre-arranging your affairs to avoid probate and also efficiently transfer the assets regardless of whether pre-arrangements were made or not.

Life insurance proceeds or retirement plan benefits left to minors, survivor-ship interests in joint tenancy property that have not been documented, oil and gas interests, interests in partnerships or businesses are just a few of the problems you may need help resolving.  Arizona property owned by a decedent in another state is another common problem.

Some issues can be resolved by recording or filing a death certificate in the proper place, small estate affidavits can be used to good effects under some circumstances, and in some cases a probate case in one or more jurisdictions may be required.  This much is true, choosing the wrong process will delay the resolution and increase the eventual cost.

Even if all the decedent’s assets were properly owned by the living trust, there is still work to be completed before the beneficiary can enjoy the use of the asset.

To reduce the anxiety and expense of transferring assets after the death of a loved one, it is best to begin with the end in mind, which means understanding what needs to be done, having a good process in place for doing it, and having competent advisors assisting you.

I want to be that advisor for you.  Contact us to find out how we can work together.

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Observations From The Trenches: Logical Estate Planning

Over my many years practicing law I have become a niche lawyer concentrating on estate planning. A growing part of my estate planning practice involves administration of trusts and estates. An inevitable part of trust or estate administration is resolving contested matters. Unhappily, a large number of those disputes become litigated matters instead of models of dispute resolution. Worse yet, if the patriarch or matriarch is still alive they are often heartbroken when their children cannot agree about basic issues facing the family.

As I enter my 32nd year of practicing law, I realize my clients value my common sense experience just as much as my legal technical expertise.

As a result I no longer tell people I “prepare wills and trusts” because I realize the will, trust, or power of attorney is only a tool. I seldom see disputes or problems with documents, but I often see disputes or problems because assets are not properly titled, beneficiary designations are not up to date, or the chosen role players are not adequately equipped. A better answer when I am asked what I do is to say that I am a problem solver; I am a family lawyer, I am an estate lawyer focusing on the affordable and efficient transition of wealth and values in an environment that protects loved ones from the problems that come with inheriting money.

I have become a bore to many of my clients, financial planners, and others because of my obsession of putting my clients’ financial affairs in order before they reach the point in time when they can no longer do it themselves because of death or diminished capacity or ability. It is not a simple task and I force everyone connected to the plan to stop making assumptions and actually prove to me that everything is in order.

I have banished from my office the idea that anyone can take an action that gets work off their desk without being able to explain how the step taken moves a problem one step closer to resolution. Each day, I tackle the most unpleasant problem on my desk first to be sure I can clear my head. Seldom is the least pleasant also the most difficult or most important; often it is the longest neglected or the most time critical.

To me, these thoughts have become the logical basis of my philosophy of helping clients. Taking to heart my 2 favorite mottos – “begin with the end in mind” (from Stephen Covey’s 7 Habits of Highly Effective People) and my favorite Eisenhower quote – “plans are useless but planning is indispensable,” I clearly see the mission I must accomplish for my clients.

If you have not been in to see us for awhile, call us today to ensure that your family affairs are in order. We will work together until we have a high degree of confidence that your estate plan will work as intended in as many different scenarios as we can reasonably envision. If you are not yet a client and you would like to see this planning in action, call me and I will send a “Welcome Kit” to start you on our journey together.

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Is Something Rotten In The Maricopa County Probate System?

I’ve been a practicing lawyer in Scottsdale for over 30 years and I have never witnessed a fire-storm like the rage that has engulfed the probate system in the past two years.

I’d like to bring some sanity to the story and suggest a sensible solution.

If you haven’t read the horrible stories or the outrage generated by the current probate system you can catch up on the horror here, at AZCentral.com.  The stories you will read here are indeed sensational and terrible stories.  Most of them involve lawyers who are personally known to me as caring competent lawyers, and who were tangled up in difficult cases or inadequate safeguards and procedures.  The cases feature over-reaching by professionals, inability of the courts to provide adequate supervision, and victims and their families who (for various reasons) simply failed to plan.

Before you read and join in the hysteria, let me give a little bit of background: the entire probate process is an extremely emotional and technical exercise, which requires interaction between laypeople and professionals, with a system that tries to be effective for all cases—from the very small to the very large.  Lapses in the conduct of the administration in which individual cases are conducted, the frail nature of the system, and its inability to provide adequate oversight show the system at its worst.

When a reporter tells a story of a client being charged several hundred dollars to cancel magazine subscriptions you aren’t necessarily getting the entire story. You may get a quick impression of the frustration and final outcome, but you don’t get to see how the story actually unfolded.  While the fiduciary may have thought one phone call would suffice, the actual process could entail a determination of whether another family member wanted the subscription, a flurry of messages and return calls, file reviews, etc.  Suddenly what should have been a simple quick solution has mushroomed into a nightmare.  Multiply by this each step in the probate process and it is truly a catastrophic handling of the case.

But if you are outraged by these stories (and there are plenty of reasons to be outraged,) remember that you have a choice.  There are many competent, ethical lawyers out there, and many equally competent and compassionate private fiduciaries; but even the best lawyers and fiduciaries can’t help if the clients have not adequately prepared for the end of life struggle.

There simply is no substitute for an adequate estate plan.  Readers must know the difference between having just a will or a trust, or creating a whole estate plan.

Prospective clients ask whether they need a Will or a trust and what is the difference.  The real question should be “what is an estate plan?”  Just having a Will or a trust and financial and health care powers of attorney is not a complete plan.  Today, most assets can pass to beneficiaries without going through probate, but they won’t necessarily pass to the people you want, the way you want, when you want, unless you have created a thoughtful plan.  And those assets may not even get to the transfer stage if consumed during the end of life process by expenses, private fiduciaries, and lawyers.  Then when the remaining assets do pass to beneficiaries, if the plan has not been carefully constructed the assets in an inadvertent plan will be unnecessarily exposed to the creditors and spendthrift habits of the beneficiaries.

Because a Will or a trust is just a tool, the emphasis in my practice is on The Plan and how those tools will be used.  Dwight D. Eisenhower said that while plans are useless, planning is indispensable. The important work is understanding the pitfalls likely to waylay assets in the end of life process, and empowering your family and professionals to address your plans in an ethical way, so that the end result can be as close to what you intend as possible.

If you want to avoid your legacy becoming a sorrowful story of drained assets and battling distant heirs, call me today and get started on the planning process.   If you know anyone who wants the peace of mind that they have a plan that works, I welcome referrals.

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Death And Taxes In 2010

Much has been written and discussed about the absence of an estate tax in 2010.  The debate about what Congress may do rages on and is spiced up with stories about the death of George Steinbrenner and others like the Texas billionaire Dan Duncan, but the little publicized truth is that the 1 year repeal of the estate tax actually imposes both taxes and legal fees on much more modest estates.

As part of the repeal, Congress also repealed the step-up in basis rules and substituted carryover basis rules, which means that any beneficiary who decides to sell the assets they inherited will have to pay tax on the gain—the difference between the amount the decedent originally paid for the asset and the amount the beneficiary receives for the asset.  As you may imagine, this will result in capital gains taxes on many middle class Americans.

There is a limited exception that could protect many small estates, but only if the value of the estate is under $1.3 million. You may think that you have nothing to worry about, that $1.3 million is a lot of money, but you would be surprised at how many “small” estates are actually large estates.  When you take into consideration the value of a home, retirement or savings accounts, a small investment here and a small investment there… the value adds up pretty quickly.

Every estate larger than $1.3 million that fails to file the required report is subject to a $10,000 penalty.  The report must be filed without regard to whether there is any property that benefits from the step up or not. The report must be filed with the decedent’s last income tax return due on April 15, 2011.  In addition to the report to the IRS, the estate must send a copy of the report to every beneficiary or heir that received property as a result of the death, presumably including recipients of life insurance proceeds and IRAs even though no basis adjustments would apply to those assets.

These rules are complicated.  They are not intuitive, require much attention to detail in a timely manner, and carry severe penalties for non-compliance.  The 1 year repeal of the estate tax in 2010, while a windfall for the über wealthy, will be a burden and expense on more modest estates.  If you have a family member who died in 2010 with more than $1.3 million in property (including a home, life insurance and retirement accounts) transferred as a result of the death, you have only a short time to comply and avoid the serious financial penalties.

It’s a big job, and you don’t have to do it alone.  Call me for help today.

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Do You Know What You Don’t Know?

I recently came across a New York Times article that reminded me of an all too common experience I encounter in my estate planning practice. In the article author Ron Lieber recounts his experiment with 4 different Do-It-Yourself will drafting software programs and the outcome. Although Lieber goes through the pros and cons of each software program, his final conclusion is that while these programs may make you feel safe, they simply can’t give you the level of protection a trained attorney can—and in some cases these programs actually do more harm than good.

Unfortunately, I am often the bearer of this kind of bad news after the damage is done.  Lawyers consulted after a death cannot undo the damage done by an inadequate or incomplete estate plan, we can only do the necessary work to administer the estate and transfer the assets, hopefully, but not always, to the intended loved ones.  Unlike writing on a blank slate if nothing had been done, first, I must erase the unintelligible mess before I can begin.  This is generally expensive, meaning that the self help remedy defeats its own purpose by becoming more expensive than had the client consulted a competent lawyer in the first place.

The Attorney General of the state of Washington agrees with me.  In an announcement explaining the terms of a recent settlement with LegalZoom, the Attorney General expressed concern that the advertising and service offered was misleading because although it provided forms, it couldn’t provide the advice necessary for a consumer to determine if the forms were being completed properly.  The enforcement of its unauthorized practice of law rules is a major victory for unwary consumers and a lesson for us all.

Something happening in Washington may seem far away from our lives here in Arizona, but this is a serious issue that affects anybody considering an estate plan—or legal work of any kind!  I strongly urge you to look closer at the NYT’s article at the top of this post and then the announcement from the State of Washington.

It all comes back to the fact that you simply don’t know what you don’t know. Finding professional advisors whom you trust to help you determine your intent, to spend the time it takes to know you and your family, and to design an estate plan that will be efficient in terms of cost and effectiveness is of the utmost importance.

In the midst of designing an extraordinarily complex plan recently, I delivered drafts for review of multiple trusts and documents to the clients, one of whom honestly asked if they needed to hire someone to read and explain the words to them.  In the same week, a prospective probate client delivered a perfectly organized file consisting of 30 or more documents that had been prepared by a combination of document preparers and online do-it-yourself packages, all of which looked very good and which had taken a very long time to create and organize.  Unfortunately, all of those documents individually (and certainly the group as a whole) failed to achieve any of the primary purposes – it did not avoid a probate process, it did not transfer the assets to the intended persons, and it will not avoid legal fees.

What do these 2 seemingly disparate examples have in common?  Without knowing what they didn’t know, the client and the prospect were unlikely to make the right decision without relying on the expertise of a competent professional.

I believe estate planning is an important partnership.  If you teach me about your family, your finances, and your hopes, dreams, aspirations, and intentions, then I will teach you the law that must be applied to achieve the result you want to obtain.

The rest is just hard work.  Legal documents are tools to achieve a result.  Anyone can buy a hammer and saw at the local hardware store, but not everyone can build the house they want to live in.  You have spent a lifetime acquiring knowledge and skills and applying your talents to build a life; do you really want to take a chance not knowing what you don’t know?

Estate taxes, gifting, revocable and irrevocable trusts, heirs and beneficiaries, trustees and executors, estates, probate, Last Will and Testaments, power of attorneys, health care directives, and more are the language and stock in trade of good estate planning; using them correctly is difficult.  EVERY case is “fact specific” which means that your circumstances and intentions dictate how the resulting documents are drafted.  Form documents are like a broken clock that is right only twice a day.  Your family may pay a terrible price for the false sense of security of form documents.

Laws and common practice are complex and ever changing.  If you want an estate plan that works, call me.

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7 Fatal Problems Of Joint Accounts

When fewer than half of all adult Americans have estate plans, you must ask yourself: why?  One answer is that many people think they have already taken care of how their assets will pass to their heirs through joint tenancy.  Joint tenancy works well if nothing out of the ordinary exists or occurs; but there are many problems that may arise.  Here are just 7 of the worst things that might happen if you use joint tenancy to pass your assets on to your heirs:

  1. No creditor protection is available when property passes by joint tenancy.  Creditors come in many shapes and sizes these days.  Jury verdicts in even the most common accidents easily exceed insurance limits.  Aging survivors are more susceptible to lapses of concentration while driving or otherwise.  All of the survivor’s assets are exposed to creditors when assets are in joint tenancy.  A trust based plan can provide creditor protection to your spouse or your descendants.  This valuable protection can not be purchased at any price if you miss this planning opportunity.
  2. Defeats an Estate Plan. Property in joint tenancy passes to the joint tenant even if your Will indicates a different result.  Heirs other than the joint tenant get nothing.  If the joint tenant tries to distribute property to other heirs there will be a gift tax consequence.
  3. No estate tax protection for post-death appreciation is available if joint tenancy is used.  Although the asset will pass to your spouse estate tax free; upon the death of the survivor the entire estate is exposed to estate taxes and the tax exemption normally available to the first decedent will be lost.  If your estate (including life insurance) is likely to exceed the Applicable Exclusion Amount (scheduled to return to only $1,000,000 in 2011) then you have unnecessarily benefitted the government at the expense of your descendants.  However, if a “credit shelter” trust plan is utilized, the decedent’s estate, will escape taxation no matter how much it appreciates before the death of the surviving spouse.
  4. Reduced protection from accumulated capital gains. Individually owned or community property receives a “step up” basis to fair value at the date of death and your heirs can sell the property and pay no capital gains.  If property is held as joint tenants, the joint tenant avoids probate, but receives the favorable “step up” basis treatment on only one-half of the property.
  5. Lack of control. A joint tenant has no control over what happens to the property after death.  A surviving joint tenant can sell or transfer the property, or can pass it to the survivor’s choice of heirs, including subsequent spouses.  Joint tenancy deprives you of the assurance that your property stays in your bloodline.  Without any further planning, property owned by a surviving joint tenant will pass automatically to the heirs of the survivor.  If the survivor’s heirs are not the same as the decedent’s heirs, an undesirable result may occur.
  6. Guarantees public probate proceedings. Although there will be no probate administration when the first joint tenant dies, then (unless the survivor creates a new plan) a public probate proceeding will be necessary to complete the transfer of the property upon the death of the survivor.
  7. May subject you to expensive and potentially devastating results. Joint tenancy property is fair game for your joint tenant’s creditors.  Although you may have an opportunity to prove your property was placed into joint tenancy for convenience and that the property really does not belong to the debtor, you are exposed to the expense and uncertainty of litigation.
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The Perils Of Probate, Part Two

In my last blog post I described the emotional and practical reasons why there is so much probate litigation and how to hire an experienced probate litigator; in this post I’ll mention some common contested probate allegations and measures that can be taken to avoid them or to keep them from spiraling out of control.

The Will is invalid because the testator was incompetent. Competency is a complicated issue.  My friend Jay Polk has written a treatise that is more than 100 pages long describing the different tests for competency in different probate settings.  For a will to be valid, the maker of the Will called the “testator” must meet 3 tests:

  1. The ability to know the nature and extent of his property;
  2. The ability to know his relation to the persons who are the natural objects of his bounty and whose interests are affected by the terms of the instrument; and
  3. The ability to understand the nature of the testamentary act.

This is fertile ground for disputes and must be determined on a case by case basis which is what makes such contests expensive.  Often a forensic geriatric psychologist testifies after reviewing the medical records, and treating physicians may be called to testify with varying degrees of success depending on the nature of their specialty and the degree of contact.  Lay witnesses and the nature of the Will itself may be important elements of proving a testator’s competence.  In the end it is a facts-and-circumstances decision for which very little assurance can be given at the beginning of the case; even in some of the more outrageous cases.

Undue influence was exerted on the testator. The second most popular reason for litigation is an allegation that someone exerted undue influence on the testator so that the Will does not represent the testator’s true intentions.  Any time property is not left strictly to bloodline descendants in equal shares, this issue may arise.  Expensive battles ensue over whom Mom loved best or who took care of Mom.  Just about any fact pattern can support a good faith belief of undue influence, but changes to an estate plan on a death bed or after entry into a care facility are particularly fertile fields for such claims.

The original Will cannot be found. This is not often asserted in Arizona because a copy of the Will can be admitted to probate if certain conditions proving its authenticity exist.  But it can lead to a full contested matter as to whether those conditions exist.

The Personal Representative is not fairly liquidating or distributing the assets of the testator.An increasingly common concern is that the person selected to administer and distribute the estate does not do so either in a timely or equitable manner.  Unlike the issues described above, this is an issue that arises only after the probate has been opened and the administration has not proceeded the way a distributee expected or desired.  Although efforts to remove the Personal Representative are common, those actions seldom end well for anybody and it is more common to get a court order compelling the Personal Representative to complete the work.

All of these issues could be avoided or minimized if the testator began early enough to make and update a plan, and kept all the distributees informed along the way.  Because disaffected relations are so common, the best prevention is to have a clear Will or trust that leaves little room for dispute, and name a Personal Representative whose loyalty and understanding of the complex family relationships is unquestioned.

Even in the best of circumstances, probate contests are inevitable and the best results are often obtained when the parties are reasonable, think about the result before engaging, and pursue a course that is likely in the end to be the most palatable to all litigants.  Otherwise, a full blown Will contest will be expensive and protracted.

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The Perils Of Probate, Part One

Probate litigation is a burgeoning and fertile practice area for lawyers.  There are many reasons why probate cases spawn litigation, but most grow from inadequate or defective estate plans nurtured by emotional dissatisfaction or greed.

As an estate planner since 1979, I encourage my clients to create an estate plan that takes into consideration not only the nature and size of their estate, but the hopes, dreams, aspirations and the character of their heirs and others interested in their estate.

If all goes as intended, everyone is either satisfied or at least left without reasonable grounds to become embroiled in an expensive controversy.  However, all too often, estate plans are not properly implemented–with costly and often destructive results.

Leo Tolstoy opens Anna Karenina (1961) with the now famous saying “All happy families are like one another, each unhappy family is unhappy in its own way.”  That sums up probate and probate litigation.  Well adjusted families come together after the death of a patriarch or a matriarch to console one another and then transition the wealth remaining after paying the bills in accordance with the decedent’s intentions expressed by a Last Will and Testament, a trust, or variety of other devices using beneficiary designations.

On the other hand, in contested probate matters, the litigants are often distantly related or not related and often don’t even know one another.  They seldom share a functional emotional bond and they have no familial reason to reach a reasonable solution.

As a result, other feelings become paramount, usually greed, but sometimes hurt emotional feelings that remain unresolved interfere in rational thinking.  The process frequently snowballs out of anxiety and lack of good information.  Usually the emotions, greed or otherwise, escalate before the litigants seek legal counsel and the litigants become emotionally entrenched in their positions, however unreasonable.  This phenomena was recently explored in an Augusta Chronicle article that described why a current estate plan was crucial to avoiding probate contests.

Lawyers are served up on the horns of a dilemma.  Their new client is entitled to competent legal representation and such representation may cost more than the amount in controversy.  Litigation is expensive with probate litigation fees for experienced counsel often between $300 and $400 an hour.  Additional experts are usually required.  If the competency of the decedent or the due execution of the Last Will and Testament is involved, there will be doctors and other experts involved, as well as fact witnesses to be deposed.  Litigants need to be aware of the potential costs before proceeding; and rational solutions–however unfair–suggest themselves when a small amount of money or property is in question.

Mediation is often a good solution, and most efficient if conducted early in the litigation before legal fees and costs run amuck.

A litigant’s best friend is an experienced lawyer who understands the probate process and the probate law, who can reasonably forecast the likely results, and who works toward that result in as uncomplicated a manner as possible.  In addition to the usual questions about how the lawyer charges, how long he has practiced law, and what qualifies him or her to represent you in this matter, good questions to ask before hiring a lawyer for a contested probate matter include:

  • Describe your specific recent experience in probate matters.
  • How much of your practice is devoted to probate litigation?
  • What do you do the rest of the time?
  • After hearing my side of the story, what else do you want to know before forming an opinion of likely outcomes?
  • Based only on my story, what do you perceive to be the most likely outcome and what other outcomes are reasonably possible?
  • What factors determine my total overall cost and what do you reasonably expect the cost to be if the case follows the path you anticipate?
  • If more than 1 lawyer is to work on my case, how will those lawyers bill for their time?
  • What additional facts would change your mind about the outcome or the cost?
  • Do you carry malpractice insurance and if so in what limits?
  • Have you ever been subject to professional discipline?  And if so, explain.

In my next post, I will explain some of the common types of contested probate litigation and how to avoid them.

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