Sunday, November 25, 2012

Wills With a Kicker

Sometimes family members feud.

Sometimes its irreparable (in the eyes of the participants.....I would always beg to differ, but that's another story).
Sometimes thoughts of mortality and money will lead a person to take action.

So they make a will....with one main make sure that "X" doesn't get anything. Sometimes there are related purposes, to make sure that "X" gets the message, or knows what he missed out on, but the theme is the same......."X" gets nothing.

I've done a lot of wills like this. In these situations, one thing you don't want is a will contest in the future. Sometimes the main problem the will-maker has with "X" is "he's the kind of person who would contest a will". The solution to this is something we learned in law school, which students think could never actually occur, but in practice is does.  It's called an "in terrorem clause". Sounds pretty's how it works. You leave "X" enough of a bequest to make it interesting, and add a clause that says, in essence, "If after my death "X " takes ANY steps to contest this will, he will get ZERO". 

People who are so inclined seem to love this suggestion, but some real thought has to go into it. To make it effective, you actually have to leave "X" something in the Will. Clients in this situation will invariably say "So leave him $10".   However, this is not the way to do it, because "X" would have nothing to lose.  The preferred approach is to leave "X" a bequest of say, $15,000 or $25,000, or $50,000, in a million dollar estate, and let him deal with it.

Sometimes people don't want to do an in terrorem clause, but they do want to leave "X" nothing, and they want to minimize "X"'s chances in a will contest. One thing I always do, if someone is being left out, is specifically refer to them. It can be as simple as "I intentionally make no provision in this Will for X, and this is not due to an oversight".  Some people go further and say something more....."I leave X zero because he .....whatever." Another one I have had, more than once, is "I leave nothing to X, for reasons which are well known to him." I didn't like it, but the clients wanted it and I did it.  I always wondered if X really knew the reasons.

If there are any potential issues regarding the will-makers competency, steps must also be taken to ensure the Will will stand. This would include using the best witnesses possible, keeping the language of the will as simple as possible, keeping detailed notes, and making sure you can document that you (attorney/draftsman) met with the will-maker ALONE.  I have been examined by the attorney's for potential Will contestants, who were not happy to see the steps I took to prevent them from effectively contesting a Will I prepared.  

There are legal provisions for video-taping a Will, but I have never done it. I'm sure it is done, but I suspect not that often, and I can see many reasons not to.  

Why all the fuss about possible will contests? Consider attorney can take a will contest on a contingency fee. There are often high stakes, where the will contestants and the will beneficiaries shares will vary by hundreds of thousands of dollars based on the outcome.  When Will contest cases first appear in Court, the first thing the Judge will usually say is...."any way to work this out?"  Sometimes they can be settled, sometimes not.  Like many other things in the law, better preparation leads to better ultimate results.

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