Most people don’t anticipate an inheritance dispute in their family, but when it happens, it can destroy family relationships. There are common scenarios that lead to inheritance disputes. David Skidmore and Laura Morris are probate litigation attorneys with Warner Norcross + Judd, and they represent individuals and families in inheritance disputes across the state of Michigan. With this article, they share lessons learned from their past cases and ways to avoid inheritance disputes in your family.
Here are four ways to help avoid an inheritance dispute in your family:
1. Choose an Estate Planning Pro.
Inheritance disputes arise from poorly drafted documents. If a will or trust is unclear, then family members may disagree over how to interpret it, with each member favoring a self-interested interpretation. That disagreement may turn into a lawsuit. Even if your family agrees on how the unclear language should be interpreted, it may still be necessary to have the Probate Court make a ruling on the issue.
Your intentions are more likely to be upheld if they are clearly expressed in well-written documents, prepared by a premier estate-planning attorney. Not every attorney creates the same quality work product. “Pennywise and pound foolish” applies to the client who saves money on a bargain attorney, only to receive inferior documents which spawn an expensive legal proceeding. Work with an attorney who specializes in estate planning ─ ideally, an attorney who only does estate planning.
A well-written estate plan drafted by a reputable and skilled estate planner, who worked with the client over time and documented the client’s intentions as they changed, is difficult to challenge.
2. Don’t Involve Your Beneficiaries in Your Estate Planning.
Inheritance disputes arise when someone believes that a person was unduly influenced to change his or her estate plan. Undue influence, if proven, will invalidate a legal document including an estate plan.
To avoid undue influence disputes, your beneficiaries should not participate in your planning. Otherwise, there may be a question whether this beneficiary improperly influenced you. Under no circumstances should a beneficiary attend meetings with you and your attorney or be present when you sign the estate plan.
Michigan law presumes that a document resulted from undue influence if it benefits a person who is in a confidential or fiduciary relationship with you, such as your agent under a durable power of attorney, or a family member who is informally managing your finances. Hence, a person who has legal, financial or caregiving authority over you should have no involvement in your estate planning. After the estate planning is signed and complete, it is okay (and actually encouraged) to share the plan with your family so everyone knows what to expect.
3. Document Your Intentions with Joint Accounts.
Inheritance disputes arise over who should receive the funds in a joint account at the death of the first owner. In Michigan, there is a presumption that if you add another person to your bank account as a joint owner, that you want the other named owner to receive all of the funds at your death. For spouses, this is typically the intent. However, when a parent adds just one child to the account, disputes arise over whether the parent intended to leave the account to just the child listed or for the funds to be split equally between all of the children.
Most people assume that a person’s estate plan dictates what happens with funds in a joint bank account at death, but that is not the case unless the will specifically identifies the intent with each joint account created. Joint account disputes pit siblings against one another and can be avoided by informing your estate-planning attorney of the creation of a joint account and simply documenting your intentions as to who is to receive the funds in the joint account at your death. This simple step can avoid a lawsuit.
4. Dementia + Estate Planning = Get a Cognitive Evaluation.
Inheritance disputes arise when a person who has been diagnosed with dementia or is showing sign of cognitive decline engages in estate planning. A legal document, including an estate plan, can be set aside if the individual did not have sufficient mental capacity to understand what he or she was signing. The likelihood of a challenge is significantly increased if there is a change to the estate plan that deviates from a prior estate plan or disinherits a child or other family members. The most effective way to ensure your estate plan does not get challenged on the basis of a lack of mental capacity is to undergo a detailed cognitive evaluation as close to the time you sign your estate plan as possible.
David and Laura are trial attorneys who help individuals, families, trustees and charitable organizations through a myriad of complex and routine inheritance disputes, charitable gift disputes, probate matters and elder law issues. Please contact David Skidmore or Laura Morris at [email protected] or [email protected] for help in a current or future probate matter.