In a contested estate situation, family members are mad, often fighting mad. A common client question is, “When are we going to court?” Perhaps surprisingly, our usual answer to this is, “Only when everything else has failed and you do not have other options.”
Contested estates generally involve a limited number of claims. These include:
- A Will or trust is invalid due to lack of capacity, undue influence or coercion.
- An action for removal of a trustee or executor, usually due to alleged mismanagement of a trust or estate, and/or failure to make distributions.
- An action for an accounting for a trust or estate.
- Guardianship for an incapacitated adult (often to try to stop abuse of a power of attorney).
There are some instances where going to court is required or necessary. For example, there is a specific time period to contest a Will and a court filing is required. Or, if there is an imminent action that will harm the beneficiaries of an estate (such as selling an important estate asset), the beneficiaries may go to court to seek immediate restraints. In a recent public example of this, the beneficiaries of the Prince estate (his siblings) went to court to try to remove the corporate executor, Comerica Bank.
However, in many cases, a client is best served by not running straight into court. Lawsuits are expensive, emotionally draining, and follow very defined rules (regarding discovery and motions, for example). It is frequently preferable to try to negotiate a resolution with another family member or party in advance of filing a lawsuit. The threat of the lawsuit often is sufficient to bring parties to the negotiating table. Negotiation frequently will be effective for the parties to explain their respective positions, and explore whether the dispute can be resolved through an agreement. Mediation, usually with a retired judge as a mediator, is also an option to consider and much less expensive than a lawsuit.
Here are some examples of recent matters in our office that were resolved without resorting to litigation:
- A trustee agreeing to resign and a new trustee being appointed.
- A trustee agreeing to make annual distributions of an agreed-upon amount from a trust.
- A trustee agreeing to change investment advisors and the investments of a trust to produce more income for a beneficiary.
- An executor agreeing to sell family real estate and distribute the proceeds to the beneficiaries after years of refusal to do so.
- A full accounting of a trust for several years, and resolution of alleged improper actions with monetary payments to the estate beneficiaries.
Often, it is inadvisable to rush into court as a first step in a contested estate. An attorney can be a zealous, even aggressive, advocate for his or her client without commencing a lawsuit. Attorneys with experience in the area of contested estates can provide guidance as to the best strategy and approach to achieve the client’s goals.