By David Inabinett
Many of our estate planning clients put great thought into their final wishes as they write their wills, create trusts or name executors. Despite the planning, there may still be disputes over how the estate is handled. Here are the three most common estate disputes we see:
- Division of tangible personal property can be a challenge, especially when the property may have sentimental value or be perceived as valuable. When there are multiple heirs getting “equal” shares per the will, determining value and how the assets will be distributed can lead to animosity. There are a few practical options to avoid this conflict. One of our clients had her children come to her home together and go through her belongings. They worked out a list of who would receive which furnishings, art and jewelry. She included this list, signed and dated by her, with her will. Another option is to bring in an independent appraiser to value all the items in question. These items can then be divided, round-robin style, with each party receiving items up to the value of their share. Items no one wants can be sold and the proceeds split evenly. One important note: should an individual die intestate (without a will), North Carolina law determines how the estate will be distributed. This may not be how the decedent and his or her heirs would have planned and can cause quite a bit of friction or unintended results.
- Shared real estate is another area where potential conflict can arise. When there are multiple heirs, each may have different ideas about whether to sell the property, keep it and utilize it, or rent it out. There may also be arguments about how to split the costs of maintaining the property, managing it as a rental or preparing it for sale. Even in a case where all parties agree to sell the property and split the proceeds, the sale may be contingent upon certain repairs being made before closing – repairs that must be paid for up front. Real estate passing to heirs may be encumbered by a mortgage that is not yet paid off. Discussing this ahead of time may avoid some conflict between the parties.
- Naming an executor for your estate is an important consideration. Unfortunately, we sometimes see disputes where the executor has an adversarial relationship with one or more of the heirs or a personal interest which is adversarial to the best interest of the overall estate. The executor may elect to make it difficult for the heir(s) to receive the assets in a timely manner by the way they administer the estate. As you name an executor, consider their relationship with the heirs. In some cases, naming an unrelated third-party as executor may make the most sense.
Another dispute that we see less frequently is where someone alleges the deceased was incompetent or was subject to undue influence in the making of a will. Living probate is one way to avoid this challenge or structuring your estate through a revocable living trust or to pass by beneficiary designations at the financial institutions where your assets are held. If you have questions or concerns about estate administration and potential pitfalls that can arise after one’s death, contact us today to schedule an appointment with an estate planning attorney.