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Estate Planning Scenarios Leading to Litigation — Not the Brady Bunch!

by | Feb 14, 2022 | Firm News

Buffington Law Firm’s team of trust litigation attorneys has recently been asked to discuss certain estate planning practices or scenarios that tend to lead to trust litigation, i.e. trust disputes.  Our Firm has been handling Trust disputes for decades.  In this series of articles we will highlight some of these practices.  We must preface this by saying that there is nothing inherently wrong with most of these estate planning techniques; people have a right to pretty much make their testamentary provisions however they like.  Nonetheless, in several decades of practicing trust litigation it has become clear to us that certain estate planning techniques and approaches seem to significantly increase the chances of a nasty trust dispute after one or both trustmakers (“Trustors”) dies.  Most people hope to avoid rather than encourage litigation over the trust provisions.  Estate planning attorneys tend to dread litigation because it opens them up to accusations of attorney malpractice, and because most estate planning attorneys pride themselves in drafting good estate documents that avoid disputes.  Trust disputes can be unpleasant.  Trust disputes are something most people seek to avoid. We hope that this series of articles helps explain some of the pitfalls that can lead to a serious dispute.

The Non Brady Bunch Trust Scenario — Common Trusts Late in Life.

In modern day America it is very common for a couple to get married whereby each spouse has children from a previous marriage.  It is most often the case that these children are now mature men and women with their own lives, families, and careers.  Most of these scenarios are thus not the “Brady Bunch” situation in which the children all grow up from young ages together as a family.  While each spouse may have a good relationship with the grown children of the other spouse, these are usually not the objects of his or her testamentary intent. Typically each spouse wants to provide for his and her own offspring by means of creating a trust.  Thus, after getting married, not uncommonly the spouses seek out a qualified estate planning attorney.

Very commonly the estate planning attorney suggests that the newly married couple create a trust together.  Certainly this trust may have provisions that everyone intends will take into account the different heirs of each spouse.  Nonetheless, the question we ask is: “Why?”.  Why not instead create separate trusts for each spouse, thereby keeping the property automatically segregated?  The cost of creating two trusts should not be all that much greater, since each of the trusts can perhaps be much simpler.  Usually in these later in life marriages both spouses have a lot of separate property and considerable estates that someday they intend to go to their own children.  We question the wisdom of combining these estates into a single trust, however thoughtfully its provisions try to account for the fact that the two spouses have separate property, different heirs, and different estate planning objectives.

Very often a common “late in life” trust provides fertile grounds for a dispute.  Make no mistake, very commonly after the first spouse dies (the “Deceased Spouse”) the Surviving Spouse focuses like a laser beam on manipulating things to the advantage of his or her own children.  It happens often.  Very often.  The heirs often know this and see this, and the disputes begin.  The children of the Deceased Spouse usually have the right to demand accountings of the Trust, which means that they have the right to dispute the way the Surviving Spouse manages the Trust by bringing a Trust Petition (a form of lawsuit) in which they file Objections to the actions of the Surviving Spouse as reflected in the accounting.  Often the Surviving Spouse gives them good reason to object.  And sometimes when this does not happen–the Deceased Spouse’s children do not require an accounting–not infrequently the Surviving Spouse uses this lack of transparency to the disadvantage of the deceased spouse’s children.  There are an infinite number of ways this can be done.  Sometimes the Surviving Spouse depletes the Trust by quietly making gifts to his or her own children, for example, using funds from the Decedent’s Trust perhaps.  While there are ways to make a common trust like this safer for the Deceased Spouse’s children, we question the wisdom of having such a common trust.  Separate trusts, with provisions for the Surviving Spouse if necessary, seem much more likely to avoid post-death trust disputes by keeping the estates separate.  Buffington Law Firm’s trust dispute attorneys have handled many cases in which one spouse acted to the severe disadvantage of the deceased spouse’s heirs in a “Brady Bunch” style trust.  When this happens, a lawsuit usually follows.

If you are involved in a trust or will dispute we invite you to contact our Firm for a Free Legal Consultation.  All such discussions are with an experienced trust litigation attorney, are protected by attorney-client privilege, and there is never any obligation.