When you are planning your estate, you may make a decision that is not going to sit well with someone that is expecting an inheritance. Most people have heard of will contests, so this may be a source of concern, and we will provide some clarity in this post.
The Probate Process
If you use a will as your asset transfer vehicle, you name an executor to handle the administration tasks after you are gone. The court will provide supervision, and creditors will be notified about your passing.
An estate bank account will be opened by the executor so that final debts can be paid, and they will identify and inventory the assets that will eventually be transferred to the heirs. The court is charged with the responsibility of determining the validity of the will.
Because of this requirement, if anyone wants to contest the will, they can make a case before the court. There are clearly defined acceptable grounds for will contests, and one of them is incapacity, which is not uncommon among elders.
Undue coercion, fraud, and improper execution are the other grounds that can be used as pretexts for will challenges. Probate will take about eight months at minimum even if there are no complications, so a will contest can definitely draw out an inherently time-consuming process.
Living Trust With a No-Contest Clause
A simple will is not necessarily the best asset transfer vehicle to utilize, and this is especially true if you are concerned about an estate contest. If you utilize a living trust as the centerpiece of your estate plan instead of a will, you would be the trustee while you are alive.
When you are drawing up the trust, you name a successor trustee to administer the trust after your death. The trustee would not be required to work under the supervision of the probate court, so there would be no ready-made forum for estate challenges.
You can include a no-contest clause when you are establishing the trust. This would state that anyone that is named in the trust as a beneficiary would lose everything if they challenged the terms of the trust.
If you leave an inheritance to someone that is less than what they think they should receive, and you include a no-contest clause, they could file a lawsuit to challenge the trust terms. However, would they be willing to risk their inheritance?
Aside from this disincentive, they would have to dig into their own pockets to pay for legal fees, and there would be no guarantee of success. There is a very good chance that they would simply accept the terms that you set forth and make no waves going forward.
Additional Living Trust Benefits
The avoidance of probate and the ability to make it hard to challenge the terms are two advantages, and there are others. You do not have to provide lump sum inheritances to the beneficiaries all at once with no spending safeguards when you have a living trust.
A spendthrift clause can be included, and this will protect the assets from the beneficiaries’ creditors after your passing. With regard to distributions, you can instruct the trustee to distribute assets incrementally over an extended period of time.
There is also an incapacity planning benefit. It is not a pleasant subject to contemplate, but 11 percent of seniors have Alzheimer’s disease. The figure rises to 32 percent among those that are 85 years of age and older, and this is not the only cause of cognitive impairment.
If you have a revocable living trust, you can name a disability trustee to administer the trust in the event of your incapacity. This can be the successor that will manage the trust after your death, or you can name someone else to serve as a disability trustee.
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While he was in law school, he worked as an aide to the late John Sparkman, Senior Senator from Alabama. This gave him the opportunity to gain intimate knowledge of the workings of government, and this background has served him well.
He started his private practice in New York in 1974, the first Sikh to be admitted to the bar in the state of New York.And in 1995, when he narrowed his legal focus to the areas of estate planning and elder law, the prestigious American Academy of Estate Planning Attorneys accepted him into their membership.
Special needs planning is an important aspect of the field, and Mr. Khalsa has intertwined his empathy with his expertise to become a leading advocate in this area. Shortly after the Education for All Handicapped Children Act was enacted in 1975, he won the first case in New York that was adjudicated under this law.
S.J. Khalsa has a penchant for philanthropy, and he has raised well over $20 million for charities nationwide. He is a deeply spiritual man who represents the Sikh religion at religious and interfaith gatherings all over the globe.
He believes that successful professionals should contribute to the fabric of their communities, and to this end, he works with law enforcement in New York.
Mr. Khalsa is a graduate of the FBI Citizens Academy program, and he is active in their Alumni Association. He is a member of the FBI/New York Police Department Joint Task Forces on Civil Rights and Hate Crimes, and he sits on the Community Engagement Council that advises the FBI Assistant Director for New York.
He is the author of the highly acclaimed book, Estate Planning Essentials: A Guidebook for Modern Families. Lawyers of Distinction recognized him for his excellence in 2020, naming him a 2020 Power Lawyer, and he is a member of the prestigious American Academy of Estate Planning Attorneys.
Mr. Khalsa lives in Manhattan with his wife, and he has two grown children and four grandchildren. He likes to travel, and he is an avid golfer. As the co-owner of Kundalini Yoga East in New York along with his wife, he instructs practitioners and aspiring yoga teachers.
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