Trust disputes and trust litigation are an important part of Buffington Law Firm's litigation practice. This week's Blog article is a little different in that rather than discuss trust litigation we will discuss a few basic estate planning concepts that we believe can help parents avoid trust disputes among their sons and daughters. These suggestions are based on actual lawsuits that our trust litigation attorneys have resolved -- which lawsuits, in our opinion, were the result of poor (but well-intentioned) estate planning.
Parents usually want to pass their hard-earned wealth on to their children after they are gone. This is very basic human nature. Parents also often want to do this in a way that they hope will keep their children "together as a family..." after the parents are gone. For example, the parents may have a successful business, so they bequeath stock shares in the business to their various children. They may own a lucrative piece of real estate, such as an apartment complex or a small commercial center, so they bequeath deeds to each of their children so that each owns a percentage of the real estate parcel. And so forth. In these situations the parents are trying to both pass on their wealth, and also they are trying to preserve the family as a family after they are gone. What could go wrong?
The answer is: plenty. While estate plans as described above invariably involve the best of intentions, the fact is that when children grow up they are mostly going to lead separate lives from one another. Estate plans that entangle substantial wealth in common ownership between the siblings are a recipe for quarrels, disagreements, and yes, trust and estate litigation. Sometimes it can take years of litigation and negotiations, and substantial legal fees, to untangle estate plans of this kind. The fact is that our children mostly go their separate ways after they are adults. While parents may reasonably hope that their offspring will stay friends and come together on certain family holidays and the like, it is a serious error in our opinion for an estate plan to entangle the parent's legacy among the next generation. People do not always get along and when they have common ownership of valuable assets this greatly amplifies the chances for disagreement and even litigation.
What is the solution? We recommend that an estate plan should operate as much as possible to give the siblings clean ownership to the parent's various assets. Cash is best; it is the ultimate unencumbered asset. If cash cannot be managed, nonetheless an experienced estate planning attorney can help structure an estate plan that avoids entangling the next generation in a way likely to lead to disputes and yes, estate litigation.
Buffington Law Firm does not practice estate planning, but we handle all kinds of trust and estate disputes and problems. If you are involved in a trust or estate dispute, we invite you to call us for a no-obligation free legal consultation to speak directly with one of our experienced trust dispute attorneys.