Trusts and Estates Litigation
One of the oldest kinds of disputes concerns who inherits property after someone dies. You may think that after the passing of a loved one, people aren’t so crass as to fight over money. But you would be wrong; people frequently do this, especially if a lot of money is at stake. Specialized laws govern these disputes, and in the United States, these laws vary in each state.
Why should you continue to read this post about trusts and estates litigation?
You just died and are spending the afterlife reading blogs
You read my posts about litigation in Ancient Athens and Classical Rome and want to learn more about the oldest kinds of disputes
You want to know what to do if a will says you need to spend a night in a haunted mansion to inherit, and you want the money but are scared of ghosts
Image credit: Photo by T. W. Pietsch III of artwork by his father, Theodore Wells Pietsch II. The original drawing was donated to a museum after the father passed away. CC0, via Wikimedia Commons
Who Will Distribute the Assets?
One of the first things people may fight about after someone passes is who is in charge of settling the decedent's affairs and distributing their assets. Who can access their bank account or enter their house? Who can be trusted? It can't just be everyone all at once in a disorderly fashion.
An estate, everything once owned by a person who died, needs an "executor." The person who proposes to assume this role may go to court and explain why it should be her. It could be that the decedent's will names her. Or there may be some other good reason. If multiple people seek to be the executor, a judge may decide who is appropriate.
If someone from outside the United States dies with property here, that is considered a foreign estate. The decedent’s estate may seek to have a representative appointed in the United States and grant that person the authority to gather assets in the country to then be distributed by the executor of a foreign estate.
Fighting Over the Will or the Trust
Many people write a will before they die (few after) that identifies who should receive their property after they are gone. An executor may read these instructions and then distribute property accordingly. Sometimes heirs fight and claim that the executor is not interpreting the will correctly or following its instructions. Accordingly, they may go to court to enforce the terms of the will.
Some people want to avoid having a will and, instead, set up a trust. There are many benefits to a trust. It could have better tax consequences. It can avoid procedures in court since the trust holds property and, after the decedent dies, the property stays in the possession of the trust and does not need to be distributed. And it can allow for long-term actions under the guidance of a trustee, as opposed to one big distribution upon a decedent's death.
Beneficiaries can sue a trustee if the trustee is not following a trust's instructions or if the trustee engages in misconduct. There is often tension between a beneficiary and a trustee since a beneficiary often wants more control over assets that she feels should belong to her directly, while the trustee may resist that bid for control, to honor the decedent's wishes.
What If There Are No Instructions?
Many people die without a will or a trust, so it may not be obvious who will be their executor and what that executor should do with the assets. There are old rules that govern how assets are distributed in the absence of a will, dictating what percentages should go to a spouse or a descendant. Someone who does not get the right amount may sue in court to get what the law provides.
Sometimes the instructions are incomplete. A man who thought he had one child may leave everything to that one child in his will; but what if other children come forward later? Or a woman may leave everything in her will to a local hospital; but what if that hospital closes down before she dies? People may sue in court to argue why the executor should incorporate new information into the distribution of assets.
The Estate as Plaintiff
Not every lawsuit involving an estate is a beneficiary suing to get more money. Sometimes an executor may sue on behalf of the estate, seeking more money to distribute to beneficiaries. This often happens in personal injury cases, where the estate sues someone for causing the decedent harm. But it may also arise in the event someone owed money to the decedent and the estate wants to collect that money so the beneficiaries may have it.