Tuesday, July 2, 2013
As I have previously discussed, the estate of Huguette Clark, the wealthy recluse who willingly spent the last 20 of her 104 years in a hospital, has sparked a court battle between the distant relatives that would inherit her fortune under her first will and the caregiver and charities that stand to benefit from her second will. The predicament surrounding Clark’s estate can teach us all something about how to avoid estate battles.
First of all, one of the most common situations involving a will dispute occurs when an estate is divided unevenly. If you have to intentionally leave someone out, lay out your wishes in detail in every estate planning document you execute over the years. Many other will disputes occur amongst distant relatives, or “laughing heirs.” Simple advice would be not to name distant relatives who you don’t know the name of.
Leaving collectibles is another common issue. In the case of Huguette Clark, she left a Monet painting to the Corcoran Gallery that it doesn't even want. Before leaving tangible items, check first with the person or institution to see if it’s wanted. If not, the charitable gift would go back into the estate and be subject to tax.
An easy way to prevent disputes is to make contesting a will too risky for anyone to take. A no-contest clause would leave a little bit to an otherwise disinherited child, and if they were to contest and lose, they would get nothing. Another option is to use a will substitute like a revocable trust that allows access to assets while keeping them out of probate.See Paul Sullivan, How to Avoid an Estate Battle After You Die, The New York Times, June 14, 2013.