Some people consider estate taxes enemy No. 1 when it comes to their inheritance. However, what’s much more likely to become problematic is family conflict. These aren’t necessarily new issues, but they are becoming more prevalent as increasingly more American families are blended, life expectancy has stretched and baby boomers are aging into their golden years.
A recent poll by TD Wealth revealed 44 percent of attorneys, accountants and trust officers in Florida indicated family conflicts were the biggest snag when it comes to estate planning. Part of the problem is people have unrealistic expectations. While most expect to inherit more than $100,000, Ameriprise Financial reports most people receive less than that. Almost 7 in 10 of those expecting an inheritence were never told how much they should expect, which led to substantial confusion and conflict.
Another issue is people increasingly have multiple ex-spouses, one or both my have children from prior unions and one spouse may be much younger than the other. These are fact patterns we know have the potential to lead to trouble. Such is the case in probate litigation conflict in Indiana that the state supreme court in Indiana has just agreed to consider. In Gittings v. Deal, an adult woman claims she was removed from her father’s estate by her stepmother, and subsequently her stepbrother raked in more than $3 million in profits on property she claims they should have shared.
Here, the father/ decedent established trusts in 1985, along with his wife (plaintiff’s stepmother), indicating that when they died, a third of each estate would go to plaintiff, her stepbrother and then to any children they had.
The father died 10 years later, and plaintiff says her stepmother eliminated her as a beneficiary and trustee and didn’t tell her. Plaintiff talked to a lawyer and agreed to sign amendments transferring the properties in question to her stepmother’s trust. However, her lawyer was never given a copy of that trust showing plaintiff was removed as a beneficiary. When the stepmother died two years after her father, a second change to her trust left the remainder of what was left only to her son and his children. When plaintiff learned she and her son had been eliminated as beneficiaries, her stepbrother told her there was nothing left of the inheritance after medical bills, nursing home expenses and funeral costs. She believed him. But it wasn’t true. What she didn’t know was her stepbrother deeded several properties from that trust to himself. Within 13 years, he’d raked in more than $3 million in gas and oil royalties, lease payments and rental payments.
Plaintiff was in the dark about all of this until 2011, when an attorney contacted her to tell her.
Plaintiff filed a counterclaim, asserting breach of mutual estate plan/ implied trust, self-dealing, conversion and breach of fiduciary duty. However, the trial court ruled in favor of plaintiff and appellate court affirmed. The primary issue was that the statute of limitations had already passed, despite an additional finding that the conduct underlying her claims was improper and perhaps illegal. The court of appeals noted its reservations, but it felt it had no choice but to rule in stepson’s favor.
It remains to be seen whether that ruling will be upheld, now that the Indiana Supreme Court has granted transfer.
As our Fort Lauderdale probate litigation attorneys know, typically the best way for your relatives to avoid probate is to be meticulous with your estate planning efforts. It’s also important to communicate your plans to family members so there are no surprises upon death, and beneficiaries can understand the how and the why and everyone’s on the same page.
Call Fort Lauderdale Injury Attorney Richard Ansara at (954) 761-4011. Serving Broward, Miami-Dade and Palm Beach counties.
Say hello to the No. 1 threat to your $11 million inheritance, April 11, 21018, By Darla Mercado, CNBC
More Blog Entries:
Does Florida Probate Court Require Families to Pay Decedent’s Debts? March 28, 2018, Fort Lauderdale Estate Planning Attorney Blog