Key Points
• Communicate Clearly: A well-drafted estate plan should clearly state your intentions, especially if you are dividing assets unequally. This will prevent assumptions and reduce the likelihood of challenges from siblings.
• Document Everything: Supplement your formal estate plan with a detailed note to your attorney explaining the reasoning behind your decisions. Strong documentation can provide critical context and support your wishes if the plan is ever contested.
• Consider Deterrents: Including a no-contest clause, which provides that a beneficiary who unsuccessfully challenges the will forfeits their inheritance, can be a powerful tool to discourage litigation.
Sibling rivalry is a tale as old as time. In probate litigation, however, these emotional battles can eat away at a family’s precious legacy.
That’s why a good estate plan needs to go beyond tax and investment planning issues to consider family dynamics, particularly preventing or minimizing the effects of sibling litigation.
When siblings litigate over a parent’s estate, they are often rehashing longtime divisions. In some cases, one child’s undue influence causes a parent to change an estate plan to favor them over a sibling, resulting in a legal challenge. At other times, children who have been estranged from their parents for many years return to claim a piece of the estate pie to which they are not entitled. There are many layers to sibling relationships. And once litigation starts, it is very hard to put the milk back in the jug.
How can I settle sibling disputes over an estate?
Early mediation is often a smart way to prevent spiraling legal fees that accompany litigation. At the outset, it may be difficult for siblings to get beyond their anger and resentment, but understanding the price of that anger can facilitate a middle ground. Often, it takes time and a stack of pricey legal bills to find that middle ground. In that respect, the significant emotions tied to sibling litigation resemble divorce proceedings. In both cases, even though the parties know they are fighting over a limited pot of money, they just can’t stop.
What are some estate planning steps to avoid sibling disputes?
Here are some practical ways to prevent or minimize the impact of sibling rivalry on your legacy:
- Hire an experienced attorney. Work with an experienced estate planning attorney to ensure your estate plan complies with your state’s legal requirements. Flawed estate planning legal documents can provide an opening for a disgruntled beneficiary to undo the will and estate plan. Don’t leave your legacy open to that challenge.
- Make it clear. Clearly state your intentions. Judges tend to assume that a parent intended to divide an estate equally among the siblings, unless other intentions are clearly laid out. There may be reasons to divide your estate unequally. For example, one child’s needs may be more significant than others. You may want exclude a child from inheriting under your plan. If that is the case, make it clear in your estate documents.
- Document your intentions. Write a note to your attorney that can be placed in your estate file explaining your intentions. If you desire an equal distribution, and you fear that a child may try to get more than their share, your note should confirm that your children should be equal beneficiaries in all circumstances. If you intend to give varying amounts to each child, explain why. In some cases, a child may have already borrowed money that should be counted against their share. Make it clear, so that the siblings and the court know your intentions.
- Consider a no-contest provision. Also known as “in-terrorem” clauses, these provisions state that parties who challenge the will, and lose the fight, forfeit anything to which they are entitled under the will. See, In Re Rost, a matter that resulted in a sibling beneficiary losing millions of dollars because her challenge was not supported by probable cause.
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