It seems that as soon as news breaks about a celebrity’s passing, the next report out is how his or her potential heirs are lining up for litigation over the estate. Recently, Reuters interviewed an estate planning attorney on the East Coast who has authored a book entitled, Probate Wars of the Rich and Famous: An Insider’s Guide to Estate Planning and Probate Litigation. Here’s what he had to say about the most common reasons for estate litigation:
Remarriage. The estates of those who marry for a second or third time and have children from multiple marriages are ripe for litigation if their estate plan doesn’t provide adequately for the children of the first marriage and a subsequent spouse. To help guard against this scenario, be sure to have a prenuptial agreement in place and appoint an independent fiduciary or trustee for the estate.
Family business. Families who own lucrative businesses can get into a tangle if a clear plan is not crafted for succession and for fairly compensating spouses and children who may not be involved in the business.
Fraud. This is especially prevalent in situations where one child is caring for an elderly parent and begins to believe they are entitled to more than the other children. Re-titling bank or investment accounts to pass to one child often leads to litigation.
Family home. It is not uncommon for a child to move into the family home to care for an elderly parent. However, when that parent dies, the children often battle over who gets the house. There should be a will stipulating that the child who moved in may keep the home, but needs to take out a mortgage to compensate other siblings.
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