Individuals who have achieved professional success or inherited a significant legacy are likely to leave behind large estates when they die. They may worry about their children or other beneficiaries fighting over those resources.
Litigation initiated by beneficiaries can drastically delay estate administration. It can take far longer to complete the probate process when family members disagree about the validity of estate documents or the conduct of the personal representative. Additionally, the cost of litigation can burn through a significant amount of the assets someone intends to pass to family members or non-profit organizations.
The fights that family members have over estate resources can also cause damage to family relationships. Those thinking about their final legacy usually want to leave a positive impact on others rather than causing familial strife and financial frustration.
How can testators with sizable estates plan to minimize a risk of litigation?
With a no-contest clause
If you are concerned that a beneficiary might contest or challenge the validity of your will or trust, you can add a “no-contest” provision to your document. A penalty clause or no-contest clause deters probate litigation. Such clauses disinherit those who file faceless lawsuits against an estate or an estate plan. Testators may add no-contest clauses to their documents in the hopes of preventing their loved ones from fighting over their property when they die. The New York probate courts have the authority to uphold such clauses in cases where litigation was unnecessary and unsuccessful.
With the creation of a trust
Trusts are useful for those with sizable estates for a variety of reasons. They help reduce the likelihood of estate taxes. They also make it harder for one party to pursue unnecessary litigation over frustration with the terms of the estate plan. The decision to use a trust as the main instrument for distributing personal property can be a smart decision for those concerned about conflict related to an estate or beneficiaries misusing an inheritance.
With difficult, detailed conversations
People can help their loved ones come to terms with their legacy plans by communicating their wishes clearly. While some people do enjoy the idea of surprising family members with an unexpected disinheritance, they set their estate up for litigation when they make changes unbeknownst to their family members. By disclosing plans for the estate to others and giving family members an opportunity to come to terms with those decisions, testators can significantly reduce the likelihood of family members suing out of shock and disappointment over what they actually inherit.
Given that probate litigation can diminish the value of an estate and cause lasting damage to family relationships, proactively avoiding lawsuits with careful estate planning is often a smart move. Testators have many tools at their disposal that can limit the chances of their loved ones fighting over their estate after they die.
