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Liza Horvath


Estate Mediation


“Say not you know another entirely till you have divided an inheritance with him.”

- Johann Kaspar Lavater


The combination of the death of a loved one and the possibility of an inheritance seems to bring out the worst in some people. Most estate lawyers will agree that there is a weird phenomenon that takes place when the patriarch or matriarch of a family either dies or becomes incapable of heading the family and controlling family assets. Sons, daughters and even grandchildren jockey for position in the family hierarchy and some aggressively seek to rectify age old grudges – now that the family governance is dissolving or changing.


Whole industries have sprung up to help families avoid the sometimes irreparable damage – both emotional and financial – that can happen in families at the death of parents. Most obviously, if you can anticipate a power struggle among heirs and plan accordingly, the outcome should be optimal. For example, Del Monte Group, a group of financial planners in Alamo, recommends proactive planning with family members in a four-step process aimed at preparing heirs not only for the receipt of wealth, but for their leadership roles in perpetrating the success of the family. 


If the death or incapacity comes unexpectedly or if the current family leadership is “old-school” and believes that the children and grandchildren will work it out, prior planning does not get accomplished and it can become survival of the fittest.


Survival of the fittest in these cases, however, usually means survival of the one that has the most money to hire a great team of lawyers. One or the other of the potential beneficiaries will file a lawsuit and the litigation begins. Historically, the outcome would one of several: after numerous court hearings and tens of thousands or hundreds of thousands of legal fees are paid, a judge makes a ruling that disappoints all members of the family equally.


Alternatively, after everyone has lawyered up and contests have been filed, a judge will order mediation or arbitration and the family members, along with their lawyers, will meet with the mediator or arbitrator who is trained to help the family find common ground. While mediation or arbitration is frequently helpful, by this point much of the emotional – and financial – damage has been done from which the family may never fully recover.


An additional tool for families currently being advocated by some forward thinking professionals is pre-facto medication. The goal of pre-facto medication is to stave off full-fledged litigation after the death or incapacity of the family leader and, through a guided mediation process, help family members find peaceful resolutions to inheritance issues. The hope is that in this way harmony at home, along with a great deal of lawyer’s fees and court costs, can be preserved.


If possible, families are best served by planning ahead and preparing heirs to receive and lead.  If no preparation has been done and a death in the family appears to be leading to the courthouse steps, consider pre-facto mediation – because once that litigation bell has been tolled, it is difficult, if not impossible, to unring.


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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