Well-crafted, up-to-date estate planning documents are an imperative for everyone. They also can help ease the burdens on your family during a difficult time. Arguably, the most important document is your will.
Regardless of how harmonious your family may be during your life, there’s always a chance that a disgruntled family member may challenge your estate plan after your death. Contests over wills typically occur if an estate plan operates in an unexpected way, such as if a large amount of assets is willed to a nonfamily member while a child receives nothing. To avoid a challenge, and the possible outcome of a judge ultimately deciding the distribution of your assets, consider these strategies.
Communicate your wishes
Before you (and your spouse, if married) set the table for your will, discuss estate matters with close family members who likely will be affected. This may include children, siblings, adult grandchildren and possibly others. Present an outline regarding the disposition of your assets and other important aspects.
This doesn’t mean you should be specific but doing so will provide a basic overview of your estate. Consider the input of other family members; don’t just pay lip service to their feedback. In fact, they may raise issues that you hadn’t taken into account.
This meeting — which may require several sessions — may head off potential problems and better prepare your heirs. It certainly avoids the kind of “shockers” often depicted on screen.
While it’s usually best to bring issues out into the open, you don’t have to provide all of the specifics. For instance, there’s probably no need to publicize restrictions that may be placed on a spendthrift son or daughter.
Fortify your will
Although there are no absolute guarantees, consider the following methods for bulletproofing your will from a legal challenge:
Draft a no-contest clause. Also called an “in terrorem clause,” this language provides that, if any person in your will challenges it, he or she is excluded from your estate. It’s a good way to thwart contests to a will.
This puts the onus squarely on the beneficiary. If he or she asserts that the estate isn’t divided equitably, the beneficiary risks receiving nothing. Be aware that, in some states, this clause may be subject to certain exceptions. Contact your estate planning advisor for specifics.
Invite witnesses. Usually, little thought is given concerning witnesses to the will. It’s often just whoever happens to be around. It might even be staffers at the attorney’s office where the will is being drawn up.
But it’s far better to use witnesses who know you well, such as close friends or business associates. They can convincingly state that you were of sound mind when you made out the will. Also, choose witnesses who are in good health, preferably younger than you are and easily traceable. Finally, you may add extra witnesses for greater protection.
Obtain a physician’s note. A note from a physician about health status is recommended for someone extremely ill or elderly. For instance, it can state that you have the requisite mental capacity to make estate planning decisions and thus will be useful in negating legal challenges.
It’s important to obtain the physician’s note close to the time that the will is signed. A note from several years ago will carry little weight in court.
Draft a revocable living trust. This trust type is often viewed as a vehicle that discourages will contests. The assets transferred to the trust are governed by the terms of the trust, not your will, giving you more flexibility.
For starters, assets in a living trust are exempted from the probate process. The trust is the owner of the assets — not you. Conversely, a will is subject to public inspection and must go through probate. In most states, the disposition of a living trust cannot be contested.
Furthermore, you retain some control over the assets during your lifetime, since you can change beneficiaries or even revoke the trust entirely. Generally, a living trust is adopted to complement your will.
Examine all options
No matter how carefully you plan, there’s the possibility of an upset beneficiary who feels he or she deserves more of your estate than you provided. To minimize the chances of your will being contested after your death, discuss your options with your attorney.
