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SENIOR ADVOCATE

By Liza Horvath

 

There is a growing movement in the legal profession to reach more peaceful solutions for families when it comes to estate settlement. Dividing up an estate after a parent has died has long been a flashpoint in families — sometimes causing irreparable damage to family relationships.

Now, even some of the most aggressive and fierce litigation attorneys are growing weary of witnessing — and sometimes participating in — the devastation of families when it comes to the distribution of estate assets after someone has died.

"Too many beneficiaries are spending hundreds of thousands of dollars on attorney's fees to litigate estates that are worth just a few million," says John McDonnell Jr., an attorney who is often called as an expert witness in estate-related litigation. McDonnell is encouraging clients and attorneys to find alternatives to a lawsuit and court battle when it comes to estate disputes.

James Farrar, a partner with The Grunsky Law Firm in Watsonville, has for decades been a force in the trust litigation arena. Lately, however, Farrar has turned his razor sharp legal mind to mediation and other methods by which he can help settle family disputes without litigation. Farrar has become a skillful mediator and hopes to one day practice solely in the peaceful resolution of estate disagreements.

Almost all wills and trust agreements contain a "no contest" clause, a provision that says if a beneficiary contests the document, they receive nothing. Now, rather than threatening to take something away — the beneficiary's inheritance, for instance — more documents are providing an extra gift to beneficiaries that do not "make waves" or adding the requirement that quarrels be addressed in a more harmonious way.

Some newly drafted estate plans are including provisions that require an objecting beneficiary to first seek resolution by having the issue heard and ruled on by a professional mediator or arbiter. In estate settlement, most experienced professionals — both trustees and attorneys — can see an issue coming and can, in some instances, help estate beneficiaries move toward an agreement.

The question is, will your attorney shepherd the children toward discussing a fair and reasonable outcome, or will all sides lawyer up and start the litigation fees running?

Trust litigation is an expensive matter. The trustee uses your trust assets to defend the estate and each beneficiary pays his or her own lawyer's fees. Add to this the court fees and expert witness costs, and the money you worked hard for and hoped would benefit children, grandchildren or a favorite charity is eaten away. What is left after litigation is usually a much smaller pot of money and a lot of frustrated and angry beneficiaries.

The trend toward peaceful resolution of estate conflict is encouraging, but perhaps the best part of this new leaning is that it is being led by some of law's most brilliant minds. Minds that historically shredded family relationships appear to be tempered by kindness and compassion. This can only lead to good things for all.

 

Liza Horvath has over 30 years experience in the estate planning and trust fields and is the president of Monterey Trust Management, a financial and trust management company. This is not intended to be legal or tax advice. If you have a questions call (831)646-5262 or email liza@montereytrust.com

 


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