Updated April 12, 2022
The high-profile legal cases around celebrity icons Tim Conway and Stan Lee are putting a spotlight on end-of-life planning. Conway’s family eventually reached an amicable agreement after a contentious legal battle in court between his wife and daughter over his conservatorship. Lee’s manager and caretaker, Keya Morgan, was charged with five counts of elder abuse against Lee, including false imprisonment, fraud and forgery. Prior to Lee’s death, there were reports a number of family members were contesting his estate for the sake of their own financial gain.
Why you should consider potential family conflict when estate planning
Conway and Lee’s plight is all too familiar to estate planning attorneys and financial professionals. In fact, TD Wealth surveyed 109 attendees of the 52nd Annual Heckerling Institute on Estate Planning in 2018 to find out what kept them up at night, and discovered family conflict was number one on their list.
“Forty-four percent of planning professionals identified family conflict as the biggest threat to estate planning this year, followed by tax reform (25 percent) and market volatility (12 percent),” reported Wealth Management Magazine. The survey also revealed that 53 percent of respondents identified guardian and beneficiary designations as “the most difficult document for clients to tackle when building an estate plan” — followed by current wills (17 percent) and powers of attorney (16 percent).
While the Tax Cuts and Jobs Act, which had just become law in December 2017, was prominent in the mind of the Heckerling Institute participants who responded to the TD Wealth survey, any estate planning lawyer who’s been practicing for as long as we have at SmolenPlevy recognizes the potential for family conflict inherent in planning.
“The conflicts that can happen during estate planning pale in comparison to those that tend to arise when you fail to plan at all,” says estate planning principal Dan Ruttenberg.
“Making important decisions while a person is still alive is obviously tough for a lot of people,” says Jason Smolen, an estate-planning attorney and founding principal of SmolenPlevy. “Estate planning can prevent so much strife and uncertainty for a family, though, that it is by far the most responsible and compassionate course of action.”
Smolen and Ruttenberg offer the following estate planning tips to prevent an epic legal battle:
Review and update all of your beneficiary designations
Forgetting to update beneficiary designations is the most common mistake. It’s especially important in this day and age, when blended families are common. Designations will overrule whatever instructions you have included in your will, so even a well-thought-out estate plan can be destroyed by an incorrect beneficiary designation. In short, you don’t want your insurance money going to the wrong child or a past spouse.
Consider a premarital agreement
Prenups aren’t just about protecting the wealthier partner anymore. They are used to facilitate important conversations between the couple getting married to keep a focus on fairness for both parties. When it is time to settle an estate, having an established contract that both partners have created together can help avoid arguments among your family.
Establish a trust
A trust structure ensures your assets end up with your chosen beneficiaries. A living trust will help you avoid the time-consuming and costly process of probate, while also giving you the freedom to determine the how, and when, you want your assets distributed. For a living trust, you might need to think about a professional third-party trustee to make it fair for everyone — the spouse, children, etc.
Select appropriate fiduciaries
Among the most important decisions you can make are who will serve as a trustee, guardian, executor, attorney-in-fact, or any other trusted position needed under your circumstances.
As illustrated above, many fights develop over who has control and are they acting in the best interests of the beneficiary or themselves. Are they trusted and respected by the successor beneficiaries? You must carefully consider who will run the show, if you can’t.
Talk with an estate planning attorney
Each family is different and has its own set of complications, but an experienced estate planning attorney in your state will help guide you through completing a plan and achieving your goals.
You might also need to consider hiring your own lawyer because, if you have the same lawyer as your spouse and you are planning your estate, it can create a conflict of interest.
Contact us for assistance
Luckily, family conflicts don’t always make the headlines — as in Lee’s unfolding tragedy — but they can be minimized by good planning, with heart-to-heart family discussions facilitated by an estate law expert.
Estate planning does more than simply divvy up a person’s belongings. It sends a powerful message to everyone in the family: “All of you are loved, all of you are important, and this is how we stay connected for generations to come.”
About the Authors
Jason Smolen
Jason Smolen is a founding principal of SmolenPlevy. Smolen’s knowledge of complex estate and business issues has drawn the attention of ABC News, USA Today, E! Online, Realty Times and the Bank of America Small Business Online Community. Mr. Smolen is a graduate of the City College of the City University of New York and the George Mason University School of Law. Smolen also serves as a board member of a local citizens association and recently co-authored an article titled Why You Should Think About Spousal Limited Access Trusts (SLATS).
Daniel H. Ruttenberg
Daniel H. Ruttenberg, JD, CPA, LLM is a principal with the firm. Mr. Ruttenberg received his Bachelor of Science degree with a double major in Accounting and Finance from the University of Maryland. He earned his Juris Doctor with Honors from George Mason University School of Law and his Master of Laws in Taxation with Distinction from Georgetown University Law Center. Mr. Ruttenberg also served as the Director of the Fairfax Bar Association (FBA) for seven years. During this period, he was also elected president – the youngest in FBA history and served as a member of the Board of Directors for the Fairfax Law Foundation.
