So you finally did it … you met with an estate planning attorney and have the perfect plan in place. You’ve made sure that your overbearing son-in-law will not share in your estate, protected your other child (who never could manage money) from inheriting a substantial sum, and have made a well-deserved gift to the person who has been providing care to you in recent years. Now, how do you protect your estate plan from being challenged after your death?
There are several things you can do to protect your estate plan from challenges. None are foolproof, but they can go a long way to ensuring that your wishes will be carried out after you’re gone.
Geriatric Psych Exam
The most common grounds for challenging an estate plan are lack of capacity and the presence of fraud, duress or undue influence. Even if a person has the capacity to make a Trust or Will, they may have diminished capacity which renders them subject to undue influence by a family member or some other person who may try to take advantage of them.
One way to defend against a trust or will contest on these grounds is to be examined by a geriatric psychologist or psychiatrist to determine if you have the capacity to enter into a trust agreement or to make a Will. The doctor will render a written expert opinion as to your level of mental capacity and your ability to withstand undue influence or pressure from a friend or family member. To be most effective, this examination should be performed as close in time as possible to the signing of your estate plan.
Certificate of Independent Review
Under California law, gifts to caregivers (and some other specified persons) are presumed to be the product of undue influence. To rebut that presumption and protect the gift to your caregiver, you should obtain a certificate of independent review. This certificate is prepared by an attorney who, after meeting with you, makes a determination that the gift is not the subject of undue influence.
Private Professional or Corporate Fiduciary
You may have a child who is a spendthrift or who has an overbearing spouse or a chemical dependence problem. To protect that child, you have chosen to create a trust for him or her. One of the most important decisions you have to make is the selection of the trustee. Your first inclination may be to have your other child, who is mature, responsible and financially savvy, to serve as trustee. But to put him or her in the position of holding their sibling’s purse strings may destroy whatever relationship they now enjoy. A better choice may be to appoint a private professional fiduciary (PPF) or corporate fiduciary (i.e., a bank or trust company) to serve as trustee. PPF’s are licensed and subject to continuing education requirements. PPFs and corporate fiduciaries are familiar with dealing with difficult family dynamics and can serve as an independent, objective person to fulfill your purpose in creating the trust by managing the trust in your child’s best interest.