Anticipating Challenges in Estate Plans

Because fiduciary litigation involving trusts and estates continues to rise, estate planners and fiduciary advisers face increased risk of challenges to estate plans. A critical task for estate planning counsel is structuring an estate plan to follow the intent of the grantor while also protecting beneficiaries, trustees and the professional preparing the instrument.

Planning professionals must recognize client situations that contain heightened risk for beneficiary litigation to challenge an estate plan. Where a will or trust document provides for disinheritance, disproportionate distribution or liquidity, the risk of challenge increases. Counsel should practice a degree of defensive planning to head off common beneficiary challenges.

Estate planners can minimize damage from a challenge by carefully documenting the stages of the estate plan, from the intake and initial meeting through any communication with the client or interested parties. Counsel should also consider additional defensive strategies in drafting estate documents and at the execution of the will or trust to minimize the risk of beneficiary challenges.

Listen as our experienced panel provides a practical guide to using defensive estate planning strategies to minimize the risk and impact of beneficiary challenges.

1. Identifying risk areas of increased possibility of a beneficiary challenge
2. Potential grounds for beneficiary challenge
3. Engagement documentation
   1. Identify possible undue influence scenarios
   2. Using work papers to document the stages of the estate plan
   3. Using video recording to memorialize the execution of the instrument and substantiate testator intent
4. Drafting provisions to protect against challenges
   1. In terrorem clauses
   2. Arbitration provisions
   3. Defining post-mortem options
5. Steps to take at the execution of documents
6. Other strategies

The panel will review these and other key issues:

• Documentation and work papers to maintain in case of a challenge
• Identifying client scenarios and estate plan provisions/client intent that present increased risk of beneficiary challenge
• Benefits, risks and limits of using in terrorem clauses in wills and trusts to head off potential beneficiary litigation
• Use of video recordings to memorialize the execution of instruments
• Extra steps to establish testamentary capacity in potentially high-risk plans