Everyone needs an estate plan, but some people still don’t get around to creating one. It’s easy to see why: setting one up can quickly become daunting, according to US News and World Report. There are also some misconceptions about what an estate plan can and cannot do. Here’s a list of six things that people planning an estate may be mistaken about, including the belief that estate plans are only for the wealthy.
After an estate is settled, many people aren’t sure what to do if they receive an inheritance. There’s paperwork to fill out regarding legal and financial issues, and a lot of people may put off making difficult decisions so soon after an emotional loss. Even if you get a large lump sum, many people make mistakes and find out the money doesn’t go as far as they might have thought. CNBC has four examples of poor decisions made by people who inherited money, along with advice on how to avoid those mistakes.
As baby boomers continue to age, the pace of estate litigation is accelerating, according to Will Sleeth, a partner in national law firm LeClairRyan’s Williamsburg office and leader of the firm’s Estate and Trust Litigation team.
“Changes in the federal estate tax have grabbed many of the headlines, but I expect four other estate litigation trends will move to the forefront in 2018,” says Sleeth, who highlights some likely developments in a blog, 4 Estate Litigation Predictions For 2018.
Estate Litigation Volume: “We are very likely to see an increase in the volume of estate litigation in 2018,” writes Sleeth in the post that appears in the firm’s Estate Conflictsblog, which focuses on disputes involving wills, trusts, guardianships, and celebrity estates. One reason is the aging of our society; and with more money being passed down, “there’s much more to fight over than at any time in the past,” he observes.
Binding Arbitration Clause Litigation: Sleeth foresees an increase in litigation of certain wills and trusts, particularly ones that try to resolve disputes by shackling beneficiaries with mandatory binding arbitration clauses. “I generally think those provisions are counterproductive, as they can minimize the potential consequences of fiduciary misconduct and can increase the financial and legal burdens on disadvantaged beneficiaries,” he writes.
No Contest Clauses: The scope and breadth of “no contest clauses” will continue to expand, Sleeth says. More estate planning attorneys are drafting broad clauses that aim to control challenges to beneficiary designations or joint-account designations, and other activity like claims for breach of fiduciary duty against a trustee or executor.
“As more trusts and wills are litigated with increasingly broad (and novel) no contest clause provisions, we can expect states to make an array of new case law regarding the extent to which broad no contest clauses will be enforced,” Sleeth writes in the blog.
Default and Mandatory Rules: “Estate planning attorneys occasionally seek to limit a trustee’s duties or liability in a manner that could arguably conflict with one or more of the default duties under the Uniform Trust Code,” he writes. “Given that many states have adopted the Uniform Trust Code—or a modified version—within the past decade or so, there is not much case law that governs when and to what degree the default rules will prevail over certain terms of a trust that seek to limit a trustee’s duties or liability in various scenarios. We can expect to see a sizeable amount of litigation on this subject in both 2018 and the years to follow.”
For now, he says, anyone with a sizable estate may wish to periodically review their will and/or trust with legal counsel to ensure it’s compliant with current laws. “Taking this action now may offer peace of mind, knowing that your estate is more likely to be administered in accordance with your wishes,” he concludes.
The full column is available at: https://estateconflicts.com/4-estate-litigation-predictions-for-2018/#more-1072
With available online forms and guidance, some people may be tempted to create their own estate plan. However, making mistakes on your estate planning can be expensive to fix — if they can be fixed at all. Unintended consequences can quickly unravel a do-it-yourself estate plan.
For many, though, do-it-yourself options may be better than not having any plan. A 2016 Gallup Poll survey found that only 44 percent of Americans have a will, which means most don’t have a plan to guide their families or determine who will take care of minor children. People who don’t have estate plans are stuck in denial, sure, but many are also intimidated by the perceived complexity and cost.
Southern University law professor Dorothy Jackson has used an unusual and possibly unethical technique in naming herself as the attorney for executors of wills and estates. A law professor at LSU says Jackson’s actions are neither necessary nor customary. Jackson is now on administrative leave from the university pending an investigation into her role in drafting one of the wills. More details about the unusual methodology are available to The Advocate.
Thinking about saving some money by doing your own estate planning? Perhaps you’ve decided to purchase one of those do-it-yourself wills that are available online. However, doing your own will isn’t always the best route for many people. The Wall Street Journal and Marketwatch take a look at some of the reasons why trying to save a little now could cost your family a lot later.