As recently reported by The Hollywood Reporter, the legal saga over media mogul Sumner Redstone’s vast estate came to a conclusion when a California judge ruled that the 93-year-old Redstone had the mental capacity to change his estate plan to provide for a live-in companion (View full article).
The battle for billionaire Redstone’s estate highlights a number of issues that are present in every estate plan, no matter how large or small: family dynamics, selection of fiduciaries, and loss of capacity.
A key component of estate planning is family dynamics. For example, it is often tempting for some clients to name their oldest child as the representative of their estate. However, whether or not the oldest child is the best fit for the job may depend on their attention to detail, ability to manage assets, and relationship to his or her other siblings. Furthermore, it is difficult to predict how individuals will behave in a time of grief.
Adding further complication is that the death of an individual can often start the clock running for the time to make certain elections and file tax returns. If a fiduciary delays in administering an estate or trust, there could be penalties or interest that result. Oftentimes, a difficulty with estate planning is that clients cannot predict how their family will react to their death.
The prudent selection of trustees and executors is of course critical, even for those with significantly less wealth than Mr. Redstone. As a result, some clients entertain naming executors or trustees who are not family, but a professional who can manage assets and make decisions more objectively.
Complications from loss of capacity can be mitigated with diligent estate planning, as Trusts and other instruments may include language to address the loss of a capacity of the grantor or settlor. However, the sad reality is that many individuals experience moments of forgetfulness, while otherwise retaining complete capacity. As a result, medical professionals may come to different conclusions regarding the capacity of an individual to manage his or her own affairs.
Ultimately, even the best-laid estate plans are not invulnerable to litigation, and the more wealth that is in an estate, the more likely the plans will be challenged. The key is to hire an attorney who is not only a planner, but also a litigator of Will contests, as that attorney is more likely to see vulnerabilities and plan defensively. The attorneys at Velella & Basso have extensive experience in both areas. Call us today at (718) 931-1220 or schedule a free consultation online.
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