Demographic Trends Suggest More Estate, Trust And Probate Litigation In The Decades To Come
/I have long been interested in demographic trends, emerging technologies, cultural changes, and shifting societal patterns. For example, 20+ years ago when I was in college I read Alvin and Heidi Toffler's "War And Anti-War," which while a bit dated now predicts how future wars will be fought (but with an eye toward peace and avoiding such conflicts). Similarly, about 5 years ago I read George Friedman's "The Next 100 Years: A Forecast For The 21st Century," which was an eye-opening look at how our nation and world may likely look in the years and decades to come. I highly recommend either book for some fascinating reading, and it will be interesting to someday see how accurate or inaccurate their predictions were.
Then, a couple weeks ago I came across a very interesting article by a Georgia attorney named John J. Scroggin, in Wealth Strategies Journal, which focused in particular upon 30 positive and negative trends that will impact estate planning over the next several decades: "Where Is The Estate Planning Profession Going?" While I focus much of my law practice upon estate, trust and probate litigation---as opposed to estate planning and drafting of wills, trusts, and the like---the article still addressed my areas of interest and I thought I would share a couple excerpts here. Better yet, lawyers and laypersons should take the time to read the entire article which not only encompasses great analysis but also contains good references to other articles, checklists, outlines, etc.
For example, with regard to estate and trust litigation in general Mr. Scroggin opines that:
"(9) Estate and Trust Litigation. As a result of the combination of poorly drafted documents, dysfunctional families, incompetent fiduciaries, greedy heirs, inadequate planning and poorly prepared fiduciaries, estate litigation has been booming in the last few decades. This growth will continue.
One consequence of the increased litigation will be an increased effort by both individual and institutional fiduciaries to make sure estate and trust instruments provide for strong fiduciary protection. We should anticipate more protective provisions in fiduciary instruments, including broader indemnity provisions for fiduciaries, modifications of the normal fiduciary standards and investment polices, broader use of no contest clauses, limited liability for delegated powers and limits (or increases) on disclosures to beneficiaries. These changes will increase the need to create counter-balancing powers designed to protect beneficiaries (e.g., a wider use of Trust Protectors and fiduciary removal powers). As a result, there will be longer discussions with clients and the complexity of the documents will increase."
Related to the foregoing are Mr. Scroggin's thoughts on avoiding estate and trust litigation altogether, through conflict minimization:
"(10) Conflict Minimization. The corollary to estate and trust litigation is planning designed to mitigate the potential sources of intra-family estate conflicts. According to the Wealth Counsel 6th Annual Industry Trends Survey, the top motivation for doing estate planning was to avoid the chaos and conflict among the client’s heirs. Many clients have an abiding desire to establish structures which minimize the potential points of conflict and provide a mechanism to resolve future family conflicts. Clients want to dispose of assets in a manner designed to minimize family conflict - leaving a legacy of relationships rather than a legacy of conflict. This is a growing part of the discussion with clients and a part of their planning documents. Solutions include using personal property disposition lists, looking at real or perceived conflicts of interest when appointing fiduciaries, or passing the family business only to the children running the business. As noted above, attorneys will need to spend more time talking with clients about providing greater protections to fiduciaries and creating counterbalancing protections for heirs.
Many individual fiduciaries agree to serve without fully understanding the potential liabilities and conflict they may be inserting themselves into. Should attorneys provide written materials (perhaps signed by the client and the fiduciary) detailing the responsibility of the fiduciary, the risk of conflict and the means by which the drafter has tried to minimize those exposures? Should attorneys more thoroughly advise their clients on the necessary skill sets needed by their fiduciaries - instead of just accepting the client's choices at face value?"
In sum, as I have written before on this blog, American society is rapidly changing. The Baby Boomers have begun retiring over the last many years and will continue to do so over the next 2-3 decades. Large sums of wealth have been acquired and will be transferred to younger generations. People are living longer, and the aging population will be less competent due to Alzheimer's Disease and other forms of dementia which will lead to conflicts over whether a deceased person had the requisite capacity to execute a will or trust. These and other trends strongly support the notion that there will be increasingly more estate, trust and probate litigation in the decades to come.
Matt House can be contacted by telephone at 501-372-6555, by e-mail at mhouse@jamesandhouse.com, by facsimile at 501-372-6333, or by regular mail at James, House & Downing, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.