Wills, Trusts and Estate Planning
Fighting families are heading to probate court
Death is a given, but can you avoid a very public intra-family tug-of-war over your assets? Increasingly, battles over wills and trusts are ending up in probate court, according to several New Hampshire attorneys. The best way to avoid probate is to have a well-written will or, better yet, set up a trust and clearly communicate your intentions before death.
If you die without a will (or one that is invalid, outdated or if the will is challenged), the state oversees the administration of the estate — paying off debts, determining and distributing assets and possibly appointing guardians for minor children. It’s a costly, cumbersome and public process. And, says Portsmouth attorney William Hartlen, it “has a bad reputation. People just want to keep their affairs private.”
Over the last decade Concord Attorney Elsie Sadek has seen “a significant increase in probate litigation.” This comes at a time when court access is being reduced by mediation, arbitration and the court backlogs.
It is not clear what’s driving the change but there are obvious factors, including a “penny-wise, pound-foolish” culture that has been beaten down by a bad economy and a failure to plan, falling for cheap online alternative wills or simply money-hungry heirs fighting among themselves. Or maybe it’s even deeper than that, says Sadek, pointing to the changing nature of the traditional nuclear family.
“The family relations are more complicated,” she says, with multiple marriages and partners that spawn half-siblings that don’t have long histories or strong bonds. “It’s the Brady Bunch factor,” Sadek says. “It’s not animosity so much as it is that people just don’t know each other. There is mistrust even though there is no ill will.”
Salem Attorney David Beliveau, who is also a CPA, believes it is a mirror of society’s increasing “sense of entitlement.” The primary focus should be to simply interpret and carry out the wishes of the deceased, he says. They have the right to do what they want with their money. While most testators, the name given to the will’s author, divide their assets equally, others have very specific reasons for unequal shares. A reckless relative may be excluded as easily as a very successful one. Some assets like a lake cottage may go to a child who can afford the upkeep, but not one with modest means.
High-profile family feuds over money are notorious and New Hampshire has been at the center of at least two of them. In 1991 the illegitimate grandchild of a wealthy Manchester industrialist sued for a portion of his estate. Elizabeth Ann Charney, then a 35-year-old school teacher, failed to convince probate judge (and later the state Supreme Court) that she deserved any of the $200 million estate of Frederic Dumaine Sr., who owned among other things the Amoskeag Manufacturing Company, which in its day was the largest textile mill in the world, operating from a series of brick mill buildings that continue to define the landscape of the state’s largest city. Dumaine’s will explicitly named only his “legitimate heirs”; Charney, who was born out of wedlock, was out of luck.
A more recent case involving the estate of Nashua real estate mogul Sam Tamposi Sr. is being challenged by his daughter, Betty Tamposi. She is at odds with the management decisions of her two older brothers. But lower courts have said she has no say or right to challenge the trust because the senior Tamposi included an “in terrorem” or “no contest” clause that automatically disinherits any beneficiary that challenges the will.
These clauses are more common in wills than trusts and are increasingly popular to keep challenges at bay. Estate attorney Hartlen includes them in all his wills. He thinks the court will uphold the validity of “no contest” clauses. So does Beliveau, “It’s the live free or die state,” he says, and most clients want their directives to be followed and don’t want to reward someone who challenges it. He suggests various ways to build what he calls “a bulletproof” will or trust that include pre-approval by a judge or even something as simple as videotaping the signing and explanation of the directives.
The problem isn’t just among rich and famous families. In Coos County, the most rural and economically depressed county in the state, Register of Deeds Terri Peterson sees many middle-class people caught in a litany of “surprises” that include people without wills or invalid wills, mostly outdated or so-called “kit wills” that are boilerplate wills sold over the Internet and often don’t comply with state law.
People, she says, also don’t realize the time that it takes to settle an estate and for funds to be released. In the meantime the estate continues to accrue expenses. If the wills or trusts hold, there is also the unforeseen debt of costly end-of-life care that can easily erase modest inheritances. When asked if she has a will, Peterson answers with a definitive, “Oh, yes,” and adds that she has updated it three times since she started at the probate court 26 years ago: “I see it all.”
Basics of a Will
The basic function of a will is to distribute estate assets and to provide care and support for minor children. Since it’s very rare for both parents to die with minor children, you’d think the process of choosing guardians would be somewhat academic, but Attorney William Hartley says parents “agonize over it.” He says most settle on “two relatives, one from each side."
More than anything else, a will appoints an executor to carry out the testator’s wishes as it relates to his or her remaining assets. Unless otherwise dictated, the surviving marriage partner is entitled to the assets of his or her spouse. Also, any asset that is jointly owned with any person or persons or one that has a designated beneficiary or a transfer-on-death clause will be transferred immediately upon death.