When you are planning your estate, you are going to have to make choices with regard to how your resources will be distributed.
This can be a simple matter for some people. For example, you and your spouse may decide to leave all assets to the surviving spouse. You can then leave each of your children equal shares of the estate that is left behind by the survivor.
Unfortunately, everyone does not have the same balanced family dynamic. For some reason, you may want to distribute resources in an uneven fashion. In fact, you may even feel as though you do not want to leave anything at all to someone that would typically be in line for an inheritance.
If you are in the latter category, you should certainly anticipate a possible challenge to your estate after you are gone.
Challenging a Last Will
When a will is used as an asset transfer vehicle, it is admitted to probate by the executor after the passing of the testator. This is a legal process that takes place under the supervision of a court.
During this interim, anyone that wants to contest the will on acceptable grounds can step forward and make a case. Grounds that would be accepted include fraud, coercion, improper execution, forgery, mental incapacity, and the presentation of a more recent will.
While it is possible to contest a last will during probate, there is a heavy burden of proof on the person that is issuing the challenge. This being stated, if sufficient proof can be presented to the court, the will contest can be successful.
Challenging a Living Trust
The revocable living trust is the ideal estate planning solution for a wide range of people, and it can be a better choice than a last will. One of the major advantages is the avoidance of probate.
Though probate serves a purpose, there are some drawbacks that go along with the process. It is time-consuming, and the inheritors do not receive anything while it is underway. There are innumerable expenses that can accumulate during probate, and probate records are available to the general public.
Since asset distributions from a living trust do not go through probate, you may put two and two together and assume that there is no way to challenge a living trust. In fact, this is not the case. A disgruntled party would be able to initiate a lawsuit to challenge the terms of the trust.
No-Contest Clauses
If you have a reason to believe that an interested party may want to contest your estate planning document, you can include a no-contest clause in your will or trust. This would trigger the total disinheritance of anyone that challenges the terms.
Of course, if the party was to go forward even though they were risking their inheritance, they could potentially win the contest. And if you disinherit someone completely, or you leave them a relative pittance that is kind of an insult, they would have nothing to lose if they issue a challenge.
Careful Consideration Is Key
When you are thinking about making a distribution decision that is going to make someone feel as though they have been treated very unfairly, you should weigh the potential outcomes carefully.
It may be the only logical option given your reasoning, and at the end of the day, the choice is yours. However, you have to consider the potential fallout, including permanent disharmony among certain family members.
Attend a Free Webinar!
We conduct webinars on an ongoing basis to provide important information about estate planning and nursing home asset protection. The sessions are offered free of charge, so you should definitely take advantage of the opportunity to build on your knowledge.
You can see the dates if you visit our Hilton Head, SC estate planning webinar page, and if you decide to join us, follow the simple instructions to register.
Hunter is a member of the South Carolina Bar Association, the Beaufort County Bar Association, and has served on charitable and advisory boards in the Bluffton/Hilton Head area.
Hunter graduated from Hilton Head High School. He then earned his Bachelor of Science Degree in Economics from Clemson University, in Clemson, South Carolina.
Hunter graduated Cum Laude from Regent University School of Law in Virginia Beach, Virginia, having earned a Juris Doctor Degree. He also wrote his doctorial thesis on Estate Planning Dynasty Trusts.
Hunter has called Beaufort County home for since 1984, where he lives with his wife and two children.In his spare time he dabbles in automobiles, reading history, hunting and fishing.
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