The high-profile legal cases around celebrity icons Tim Conway and Stan Lee are putting a spotlight on end-of-life planning. Conway’s family eventually reached an amicable agreement after a contentious legal battle in court between his wife and daughter over his conservatorship. Lee’s manager and caretaker, Keya Morgan, was charged with five counts of elder abuse against Lee, including false imprisonment, fraud and forgery. Prior to Lee’s death, there were reports a number of family members were contesting his estate for the sake of their own financial gain.
Conway and Lee’s plight is all too familiar to estate planning attorneys and financial professionals. In fact, TD Wealth surveyed 109 attendees of the 52nd Annual Heckerling Institute on Estate Planning in 2018 to find out what kept them up at night, and discovered family conflict was number one on their list. “Family dynamics can be tricky,” observes Jason Smolen, estate planning co-founding principal at SmolenPlevy in Vienna, Virginia. “There are no neutral parties within a family. Everyone is emotionally involved and everyone has an opinion. That’s why you really need highly skilled and experienced professionals providing support.”
“The conflicts that can happen during estate planning pale in comparison to those that tend to arise when you fail to plan at all,” says estate planning principal Dan Ruttenberg. Smolen and Ruttenberg offer the following estate planning tips to prevent an epic legal battle:
Review and update all of your beneficiary designations — Forgetting to update beneficiary designations is the most common mistake. It’s especially important in this day and age, when blended families are common. Designations will overrule whatever instructions you have included in your will, so even a well-thought-out estate plan can be destroyed by an incorrect beneficiary designation. In short, you don’t want your insurance money going to the wrong child or a past spouse.
Consider a premarital agreement — Prenups aren’t just about protecting the wealthier partner anymore. They are used to facilitate important conversations between the couple getting married to keep a focus on fairness for both parties. When it is time to settle an estate, having an established contract that both partners have created together can help avoid arguments among your family.
Establish a trust — A trust structure ensures your assets end up with your chosen beneficiaries. A living trust will help you avoid the time-consuming and costly process of probate, while also giving you the freedom to determine the how, and when, you want your assets distributed. For a living trust, you might need to think about a professional third-party trustee to make it fair for everyone — the spouse, children, etc.
Select Appropriate Fiduciaries – Among the most important decisions you can make are who will serve as a trustee, guardian, executor, attorney-in-fact, or any other trusted position needed under your circumstances. As illustrated above, many fights develop over who has control and are they acting in the best interests of the beneficiary or themselves. Are they trusted and respected by the successor beneficiaries? You must carefully consider who will run the show, if you can’t.
Talk with an estate planning attorney — Each family is different and has its own set of complications, but an experienced estate planning attorney in your state will help guide you through completing a plan and achieving your goals. You might also need to consider hiring your own lawyer because, if you have the same lawyer as your spouse and you are planning your estate, it can create a conflict of interest.
Estate planning does more than simply divvy up a person’s belongings. It sends a powerful message to everyone in the family: “All of you are loved, all of you are important, and this is how we stay connected for generations to come.”
Contact Jason Smolen at jdsmolen@smolenplevy.com or Dan Ruttenberg at dhruttenberg@smolenplevy.com if you have any questions on estate planning.
Read more articles from the Fall 2019 Report from Counsel here.
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