Emotional and Psychological Aspects of Probate Litigation

Presented by Rodney J. Mason, Jody A. Cohen Press and James Crist

INTRODUCTION

Copyright 2010

By Rodney J. Mason, www.probate disputes.com

In this webcast hope to present a different focus on matters affecting our work as lawyers, whether they be estate planners, litigators or mediators in areas involving guardianship, conservatorship, estate planning and administration, or litigation and resolution of disputes in those areas. We will not talk about technical issues, drafting issues, procedural issues or other important legal matters which our clients take for granted. Instead we will talk about how to address the way we can help our clients to deal with emotional and psychological issues in a way which may prevent the application of our legal expertise and professional judgment. These issues may prevent our clients from taking action on our advice.

Why should we as lawyers be concerned with emotional and psychological aspects of estate planning and probate? We are lawyers, not family counselors or psychologists. As lawyers in the estate planning and probate areas, we like to talk about QPRTs, GRATs, ILITs, a cabin trust, an FLP, retroactivity of a change in the estate tax, which situs is best for the trust, MA planning and a host of other legal issues that may be properly addressed in order to obtain an optimal result. Trusts and Estates, The Journal of Wealth Management for Estate-Planning Professionals-Since 1904, published an article in April 2009 entitled "It's Personal: Estate-planning Lawyers Are Family Counselors. Time We Got Psych Training." The article states: "In fact, the psychological aspects of our job are often overlooked and misunderstood, although they're arguably more important and more complicated than the complicated tax planning, asset protection advice and legal services we provide." Our clients are dealing with their family dynamics and those dynamics affect how we practice. Do we advise solely based on important technical considerations or do we also recognize the impact of these issues on our clients' lives and decision-making?

A headline in the New York Times for January 4, 2010 illustrates the issue.

"With Death and Taxes, Timing Is All" by Clyde Haberman.

"From the fiscal vantage of our heirs, 2010 would be a good year for us to die."

Are we going to maximize tax savings or are we going to worry about Mom and her health?

We also have the long-running saga of Lady Brooke Astor whose 85-year old son reported to jail last month for financially exploiting his fabulously wealthy mother during her lifetime. Her lawyer, aged 66, was convicted of a similar crime. You can read about their conduct in Mrs. Astor Regrets, The Hidden Betrayals of a Family Beyond Reproach, Meryl Gordon, 2008. We have the Anna Nicole Smith custody dispute which reduced the trial judge to tears while sitting on the bench. Many of us have heard the following sort of exchange in court. A lawyer sought appointment of a trustee without bond in a proceeding for a court-established trust, stating that there shouldn't be a problem since the proposed trustee was a family member. The Referee immediately replied "Of all the places to suggest that there won't be a problem because the proposed trustee is a family member, the probate court is absolutely the worst place." While we are thinking about technical issues, procedural issues, evidentiary issues and so on, our clients, are also thinking about far different non-technical issues. In 1996 John Hopkins, a lawyer in San Jose, CA, stated it as follows: " . . .what we are discussing with our client also involves the relationships within their families and their hopes and aspirations for themselves and their loved ones." See p. 1, "Addressing Emotionally Difficult Issues with Your Clients," John Hopkins, 1996, unpublished article.

At page 2 of the same paper Mr. Hopkins wrote:

Yet, because of our training, we go about trying to help our clients by providing information and advice about property, taxes and the law, all of which are impersonal, concrete and free of emotion. The result is that in many situations our clients do not follow our advice, and may not do anything. We know that the reason that no action is taken is because the clients are concerned about family issues, which they find emotionally difficult to talk about, and so do we. . .

As a profession, we act as if the emotional issues are not involved, when we know they are. It is most probable that we do not attempt to deal with them because we do not know how to do so. 'It's beyond our area of expertise,' we say, but we don't know to whom to refer them for the help they need because we don't really understand what kind of help is available, or how it can help in this process.

Many times our reaction and common experience is that the emotional and psychological issues just get in the way of our performance of our job as lawyers. They prevent our clients from making the plans and decisions which they should be making. I have an email from a lawyer to his former client, now my client, stating:

I understand that you are frustrated. I can only deal with the legal issues. Your [sibling]'s bad behavior is not a legal reason to change [your course of action.] . . . I will do what you want within reason and law, but I will not be involved in family disputes or all reason and objectivity goes out the window.

John Hopkins talked about his early reluctance to deal with these issues when he stated:

Why is it that I shied away from wanting to deal with people's emotional problems? Fear is certainly one of the causes. The fear that I might open up issues and incur the client's wrath, and end up being fired. Worse yet, I could induce a family dynamic that leads to greater hurt and paralysis in their relationships. The next question becomes, 'Is the difficulty in discussing the clients emotional issues mine, or is it the clients?' Perhaps it is both; but some of it is certainly within me and, I suspect, most of us who do this work."

See unpublished article, supra, at page 5.

We also have the work of lawyers like Paul Fisher which you can read about at http://www.fishermediation.com The issue for the lawyer as well as the client is how to deal with the family issues, the emotional and psychological issues which are always present, if not always predominant. Technical skills and finely-honed professional judgment may not come into play if the professional does not address these issues. The question is how we address these issues without venturing into family therapy, psychology or other disciplines where we lack competence.

How Do Others Frame the Issue?

We have the approach advocated by the article in Trusts and Estates, cited above. We have the comments by John Hopkins in his unpublished article cited above. A committee of the American Bar Association with the name Emotional and Psychological Issues in Estate Planning frames the question as follows:

Which of the following statements best describes our function as lawyers?

A. The estate planner's function is provide technical advice; the client's grief can be a roadblock to moving the estate planning/administration process forward.

B. Estate planners should play a role in providing emotional support for the client experiencing grief.

An upcoming committee call for the committee will deal with two topics.

A. Identifying and confronting emotional & psychological issues in estate planing and litigation with large families.

B. What role, if any, do a lawyer's personal values have when advising a client planning his or her estate or a client enmeshed in estate litigation?

We have many other approaches and now turn to some specific approaches and resources.

I. Emotional and Psychological Aspects of Estate Planning

By Jody A. Cohen Press

Copyright 2010

I. Estate Planning

A. Psychological

i. Communication. Developing rapport and recognizing resistance. Financial planners may be more aware of this than lawyers. Their certification coursework involves the study of effective communication and how to elicit information. One part of this process is distinguishing among interviewing, counseling and advising.

1. Interviewing. The process of asking and answering questions. A short-term process. Interpersonal relationship typically does not develop.

2. Counseling. The process of help-giving. Long-term process. Interpersonal relationship typically develops.

3. Advising. The process of giving specific guidance or suggestions. Not the same as counseling: a counseling aspect but advisor is a subject matter expert. Advising comes after counseling.

Readings in Financial Planning, David M. Cordell, PhD, CFA, CFP, CLU, Editor. Published by the American College. www.theamericancollege.edu

ii. Drafting: Phase One.

1. Skillfully gathering the necessary information can help avoid later conflicts. A detailed estate planning questionnaire includes questions that cover the "flashpoints" that can lead to conflict. Flashpoints include, but are not limited to:

● Previous marriage(s)/relationship that produced children

● Physically and/or mentally disabled children/grandchildren

● Gifted children/grandchildren (academic, athletic, artistic)

● Poor money manager/spendthrift children/grandchildren

● Addicted or substance abusing children/grandchildren

● Nature of relationships among children/grandchildren/ stepchildren

The LeVan Company (now known as Upchurch, Watson, White and Max) created a "Flashpoint Detector" www.levanco.com

2. Anticipate hand-altered wills in terms of duress/undue influence/coercion. Include a provision to the effect that any changes in the Will or any codicils to the Will are not valid unless they are in printed form/not hand-written and that they follow the will execution formalities under Minnesota law.

3. Helping clients decide on practical choices for fiduciaries. For example: family member as trustee v. professional or corporate trustee.

4. Helping clients avoid causing hurt feelings where there are children from multiple marriages.

a. Beneficiary designations. Name children from previous marriages/relationships as beneficiaries on bank or investment accounts. Since these items pass outside of probate, the asset transfer becomes more of a direct link or direct psychological connection between parent and children.

b. Life insurance. If the client is insurable, life insurance can serve the same function as beneficiary designations. Life insurance creates "an instant estate." (If the estate is taxable, create an irrevocable life insurance trust [ILIT] and have the trustee be the applicant, owner & beneficiary of the policy.)

5. Helping clients develop realistic expectations with emotional assets such as the family cabin or the family business. If not all children are interested in the asset and there are no other equivalently valued assets, a solution might be life insurance. Again, if the clients are insurable, they can purchase a policy that names the non-business or non-cabin inheriting children as beneficiaries to "even out" the inheritance. (If the estate is taxable, create an irrevocable life insurance trust [ILIT] and have the trustee be the applicant, owner & beneficiary of the policy.)

Caveat: for this to scenario to work, there must be a family discussion so all of the children are on board. The business or cabin-inheriting children must understand and accept that if the business or cabin fails, there will be no "back up" asset such as life insurance for them.

6. Helping clients avoid "litigation trigger points":

a. Disinheriting.

b. Leaving unequal shares. The Smothers Brothers made a career out of "Mom loved you best."

c. Distributing outright to some and in trust to others.

d. Leaving the estate to one child to decide who gets what after Mom's gone.

e. Leaving the estate to pets rather than people.

f. If the client insists on these types of provisions, draft the document as factually and briefly as possible rather then being punitive and long and drawn out. See the Last Will and Testament of Leona M. Helmsley. www.nytimes.com/packages/pdf/nyregion/city_room/20070829_helmsleywill.pdf

7. Clients in Denial. Attorney needs to be realistic; withdrawal may be only option.

iii. Drafting: Phase Two: As the documents take shape, be careful how you communicate with the client and family members.

● Beneficiary distributions

● Meeting attendance

● Witnesses

● Written communications

● Meeting & will execution memoranda

● Other issues:

●Videotaping will executions

●Codicils

Winning the Will Contest At The Drafting Stage: Tips From The Litigation Trenches, Mark A. Robertson, Fulbright & Jaworski, ABA Joint Fall Meeting of the Tax Section and Trust & Estate Law Division.

iv. Document distribution: avoiding surprises or asking for trouble?

1. Should clients review documents with children?

2. Should clients give copies of documents to children?

B. Emotional

i. Mom wants a will but can't/won't see a lawyer. "When a Beneficiary Asks You to Draft a Will," Ken Jorgensen, Bench & Bar, September 2003.

ii. Single parent wants his mother to be guardian. See the Last Will of Michael Joseph Jackson. www.aolcdn.com/tmz_documents/0701_mj_will_wm.pdf

iii. Mom wants all four children to have the chance to be PR even though two are not good money managers. Help Mom understand that being PR is a job, not an honor.

iv. Dad's separated but not divorced and has new significant other. No "divorce by death." Educate dad about elective share.

v. Final letter to spouse. A final letter that leaves detailed information on the location of important papers and also allows the client to express his or her feelings to help ease the transition after death. "When I Die," created by Minnesota Attorney Ross Sussman and published by the American Bar Association.

II. Probate

A. Psychological

i. Initiating the probate

1. How soon after death?

2. Referral list of psychologists/grief counseling groups

B. Technician v. Counselor/Advisor

i. "Find It! Fix It! Fast!" Is the probate attorney's role to "just get it done" or something more than that?

Good Grief: What Trust and Estate Lawyers Should Know About Working with Clients and Grief, Cary Glober, MD and Judy Barber, MA, MFT, as presented to the ABA Sections of Tax and Real Property, Probate and Trust, September 27-29, 2007

ii. Collaboration or Litigation? When will contests or other conflicts appear imminent, what are the best courses of action?

Collaborative Practice: Probate Target Markets, William M. Andrews, IACP Civil Collaborative Practice Task Force, Chicago, August 20-21, 2004.

iii. Common Problems

1. "Failure to Launch": Adult children who never left home, or who boomerang or ping-pong. Causes: alcoholism, drug addiction, undiagnosed mental illness, learning disability, etc.

2. Covering for spouse: "Healthy" spouse dies and family discovers s/he been covering for ill spouse.

3. Referral list of social workers

II. The Role of Emotional and Psychological Issues in Probate and Trust Disputes

By Rodney J. Mason

Copyright 2010

The role of emotions and psychological issues in probate and trust litigation is pervasive whether we recognize it or not. The emotions and psychological issues can be those of our clients or they can be ours. The client may be postponing decisions. We may undervalue the importance of those issues in our own thinking or we may simply want to stay out of the fray. At the same time our clients are not looking to us as lawyers for therapy. They are looking to us for advice and for advocacy and we should never forget it.

At the same time, the emotional issues are what drives many of the disputes. Clients in some instances wonder if it is okay to disinherit the child who has spoiled every Thanksgiving dinner for the past thirty years. They ask themselves whether it is necessary to give something extra to the person who is providing them essential care. They may want to disinherit their spouse's children from a prior marriage. They may worry that their spouse is trying to favor his own children from a subsequent marriage.

These emotional issues arise during lifetime and persist beyond the grave. In many instances, money is not the motivation for a probate or trust dispute. Instead it constitutes the fuel to carry the dispute forward. In many respects, the testator whose testamentary instruments are challenged has already lost.

The law of inheritance is permeated with all of the positive and negative emotions of family relationships. Our history and our literature are filled with tales of these family emotions. We have Hamlet's rage at his widowed mother for marrying his father's brother and the news that his father was murdered by his mother's new husband. The desire for vengeance was his emotion and he feigned madness to pursue it. We have the tale of King Lear who gave away his kingdom to his two older daughters. He was then pushed to the side as a nobody and went mad trying to recover his position. We have fairy tales of the wicked stepmother but none of the loving stepmother who treated her stepchildren as her own. We have the probate morass described in Bleak House by Charles Dickens. We have the stories of Cain and Abel, Jacob and Esau, Joseph and his brothers. We have all the rivalries and all the regrets that permeate our cultural legacy. Leo Tolstoi is quoted as saying: "all happy families are happy in the same way, whereas unhappy families are all unhappy in their own way. " That human situation is what we deal with every day.

In our probate disputes, we see all of the seven deadly sins illustrated by Hieronymus Bosch: Anger, Sloth, Pride, Greed, Lust, Envy and Gluttony. When the probate or trust dispute arrives in our office, we have the compounding effect of grief.

As lawyers we can take two approaches to these situations. We can take the approach of George Clooney's character in Up in the Air, the hired gun who is paid to fire people so that the corporate executives can wash their hands of the problem. Or we can find ways to help our clients deal with emotional and psychological issues which intrude into our legal processes.

We are not trying to identify all the possible situations in which a will contest or other probate dispute can arise. Instead, we point out possible approaches and resources for dealing with these issues.

Case study #1.

Mom dies leaving her homestead and little else to her four children. Two of her children live out of state. Two sons live in town, one of them with Mom for the last forty years. This son is without means of visible support except for Mom. The other son is involved in caretaking for Mom. When Mom dies, the son who has been living with Mom absolutely refuses to participate in the process. The other three children want their inheritance but the one son refuses to move out of the house, refuses to accept process or otherwise participate. What do the other three do to realize their inheritance?

Case study #2.

Settlor leaves everything in trust for life to his four children and thereafter to his grandchildren. He names one of his children as trustee. There is valuable real estate which is ripe for development. Three of the children like the status quo and see no need to do anything. The trustee would like to develop the real estate and expends great effort in doing so. Dispute arises over compensation of the family member trustee. The trustee feels that his services are undervalued and unappreciated. The other three feel that the trustee is attempting to "milk" the situation for his own personal gain. How do you resolve the simmering dispute?

Fundamental Question

Who in the audience favors having family members as fiduciaries?

Examples of Approaches and resources.

A. John Hopkins in the article cited in the Introductions identifies a number of situations where emotions tend to rise quickly to the fore. Some of these involve the following:

1. The conflict between the objectives of legacy and welfare or security.

2. Second Marriages.

3. The presence of an heir with dependency and control issues.

4. Disinheritance of a child.

5. A family business and how it should be left. Who are the parasites and who are the plunderers of the family wealth.

6. Large Lifetime Gifts.

B. Mark Robertson of Fulbright & Jaworski made a presentation: "Winning the Will Contest At the Drafting Stage: Tips From the Litigation Trenches" at the ABA Joint Fall Meeting of the Tax Section and Trust & Estate Law Division on September 12, 2008. He recommends that planners recognize the potential of a will contest and that a will contest should be assumed any time a beneficiary is treated differently. The differential treatment may include naming one beneficiary as personal representative, disinheriting one child, preferential treatment of one or more children during lifetime or upon death.

C. Gerald LeVan of Black Mountain, North Carolina, has developed a Flashpoint Detector which is a questionnaire consisting of 51 questions, which is designed to detect situations, circumstances, persons or relationships called "flashpoints." He refers to "flashpoints" as anything which could generate future disputes, claims, or litigation involving your estate plan. Gerald LeVan and Paul Fisher made a webcast for the ABA in March 2009 on "Feuds and Flashpoints: Detecting and Defusing Potential Estate Litigation During Estate Planning and Post-Mortem."

D. The Trusts and Estates Article, referred to above, stresses the importance of questions from the lawyer about how well heirs get along, marital issues for the children, the presence of an income and asset differential among the children, multiple marriages, or adoptive children

E. In November 2006 MNCLE had a webcast entitled "Beating the Midas Curse" presented by Robert Strommen, Rodney J. Mason and William C. Kuhlmann. This seminar addressed some of the legacy planning issues.

F. We have the approaches used in different areas of the practice of law. "Emotional Due Diligence Strikes at Heart of a Deal" is the name of an article published in April 2003, by Michael J. O'Malley in the ACG Network, the newsletter of an international association for and about professionals involved in corporate growth and development. This article talks about the effect of relationships on business transactions. Mr. O'Malley states: "When the relationships are positive the system works: when the relationships go bad, the system breaks down. In a business that means the deal goes bad." In an estate plan bad relationships often results in a probate dispute.

G. Thomas Hubler, of Hubler for Family Business, has worked extensively for many years on business succession issues, family legacy issues and other family business issues. You can read about him at http://www.hublerfamilybusiness.com/. He encounters comments like the following:

• How can I stop family members from squabbling and get back to work?

• I don't want differences at work to upset our family gatherings.

H. The Handbook of Family Dispute Resolution by Alison Taylor, Jossey and Bass, 2002 at p. 40ff has a lengthy section on family dynamics entitled Alliances, Legacies and Secrets. Taylor talks about the effects of family alliances, whether they be functional or dysfunctional.

I. Lawrence Friedman has written a book entitled DEAD HANDS, A Social History of Wills, Trusts and Inheritance Law, Stanford Law Books, 2009. At page 11, Friedman writes: "Changes in family structure, changes in the nature of legal order, demographic change, and changes in social norms and attitudes have all left their mark on the law of succession. . . . [the law] has shifted emphasis from what we might call the bloodline family to the family of affection and dependence."

There are many, many resources in this arena and as lawyers we need to be aware of them.

Emotional and Psychological Aspects of Probate and Trust Mediation

By James Crist

Copyright 2010

III. Mediating the emotional probate case.

A. Common emotional probate themes. Most contested wills or trusts are viewed by the court objectively with burdens of proof and applicable law. However, it is not unusual for emotions to dominate mediation settlement discussions. The following are common emotion-laden scenarios:

1. Money Equals Love. In the heart of many children, an unequal division of assets represents an unequal division of parental love. The child receiving less is often emotionally unable to accept that the parent would favor one child over another child for a variety of good reasons. Their emotions lead them to the conclusion that the parent never would not have left them a smaller share absent undue influence.

2. Second spouse/second family. There are many emotional questions asked. How was I valued by decedent? Where was I in the pecking order. Did he look out financially for the new spouse or the old kids? Are new kids equal to old kids? Did the second spouse wreck the first family.

3. Entitlement of caregiver. When one of several children provides all the care to an elderly parent, it is not uncommon for that child to believe they are entitled to more assets or more control of the probate process.

4. Family member looking for a fight. Unfriendly siblings usually run out of things to fight about as they grow busy with their own families. When their parents die, the probate process creates a new venue for the old fight. Too often, the fight has no rational relationship to the assets involved.

5. Estranged family members. For a variety of reasons, family members stop communicating and find it impossible to work toward a common goal. Usual someone is looking for an apology about something. Often there has been a past financial matter gone wrong and a party is looking to the estate to make things equal.

B. The lawyer's approach to an emotional client. The lawyer for an emotional client can take steps to insure the mediation is a productive, more comfortable experience. At the very least, the lawyer should:

1. Thoroughly explain the mediation process to the client several days before the mediation to demystify the process. Fear of the unknown adds to stress.

2. Verify with the mediator that you will have a separate conference room for you and your client throughout the mediation.

3. Consider requesting that there be no joint meetings with the other parties.

4. Discuss realistic settlement goals with client before day of mediation. Avoid surprising the client with bad news on day of mediation.

5. Discuss the concept of admissible relevant evidence with client so he understands that some emotionally charged facts will not be considered by the court.

6. Allow the client to thoroughly and directly communicate with mediator.

C. Mediator's approach to the emotional party. Parties seldom approached a probate mediation like cool-headed businesspersons. There is almost always a level of emotion. Mediators can deal with the emotional aspect of the negotiations by listening, gently applying the law, and considering other more relevant emotions.

1. Listening. Mediators are not counselors or psychologists. Yet, they can not ignore the emotions of mediation participants. If they do, they will not be successful. Listening to the emotional concerns of a party gives that person the equivalent of their emotional day in court. Once heard, they can begin to listen to you.

2. Gently applying the law. There has always been a debate over the role of the mediator- should they evaluate the case for the parties or just facilitate the settlement without substantive comment. A candid evaluation is preferable in emotionally charged probate proceedings as it helps place expressed emotions in the context of the legal action. When the law is applied, many emotions will no longer be relevant to the outcome in court. The emotional party must be given the chance to understand that sometimes the law does not care.

3. New emotions to consider. The mediator should explore how the decision to settle or not settle will emotionally effect the participant. These question can be asked when appropriate:

a. How would you feel if failure to settle resulted in permanent estrangement with a family member?

b. How is the ongoing litigation effecting your life?

c. How is the ongoing litigation effecting other loved ones?

d. How would you feel if the judge issued a public order against you?

e. Is the money you are spending on litigation consistent with your other personal goals?

f. Is privacy in dealing with family matters important to you?

CONCLUSION

Although much of what we do as lawyers has to do with satisfying important technical requirements, analyzing burdens of proof and evidentiary issues, and otherwise advocating our clients' positions and optimizing results for them, it nevertheless remains that attention to emotional and psychological issues can enhance the process.