Estate Litigation and TEDRA
Sometimes issues can arise after a person dies that unfortunately require court intervention to resolve. The term “litigation” generally refers to the process of bringing a dispute or issue before a judge or having to involve an opposing party. While there are various types of litigation our firm handles, this article focuses on litigation that may arise during the administration of an estate or trust.
How Disputes Arise
Estate planning documents must be executed pursuant to legal formalities. If a will or a trust is signed without following the statutory protocol, then the document may not be legally binding and opens the door for a “will contest” or other dispute. A will contest is a disagreement about the decedent’s proper execution of a will or other estate planning document. Will contests also include questions about whether the decedent had the requisite capacity to sign the document, whether the decedent was unduly or improperly influenced by another party seeking financial gain, or whether the decedent signed the document under duress, fraud or forgery, just as some examples. Questions regarding the validity of estate planning documents may impact who inherits from the decedent.
Another potential dispute may arise if there is ambiguity in the estate planning documents, especially those that are informally drafted or handwritten. Parties may interpret phrases or terms differently, and when there are multiple interpretations, disagreements can occur (especially when money or a sentimental asset is at issue). What if a will makes a general reference to “an account” that is to distribute to the decedent’s daughter, but the decedent owned multiple accounts at death? Is the daughter supposed to receive all accounts or just one account? Without any further information on this specific directive, it is difficult if not impossible to tell what the decedent actually meant, and this ambiguity may cause disagreements amongst heirs. It is important for your estate plan to be clearly and accurately drafted, as this can make a positive difference in avoiding disputes between heirs after you die.
Lastly, disputes can arise while a trust or estate is being administered. A personal representative or trustee is under a fiduciary duty to act in the best interest of the heirs of an estate or beneficiaries of a trust. However, where a personal representative or trustee does act appropriately, their loyalty to the heirs or beneficiaries can be called into question. This is often seen where a fiduciary improperly spends estate or trust funds on personal items or engages in other types of self-serving transactions, distributes assets incorrectly, or fails to keep track of or preserve assets. Heirs and beneficiaries have the option to request court intervention to clarify estate or trust accountings and inventory, or even in some circumstances seek the removal of the personal representative or trustee.
Fortunately, Idaho has a comprehensive statutory mechanism to resolve trust and estate disputes. The Trust and Estate Dispute Resolution Act, Idaho Code § 15-8-101 et. seq., often referred to as “TEDRA” provides broad authority for the parties and courts, if necessary, to come to an agreement or other resolution regarding trust and estate disputes. The overall purpose of TEDRA is twofold: first, to provide for nonjudicial methods for the resolution of matters by agreement or alternatively, if no agreement is met, to provide a path for judicial resolution of contested matters. Most trust and estate litigation matters fall under TEDRA because of the broad applicability. TEDRA allows parties to enter into a legally binding settlement agreement, without court involvement, if everyone agrees as to disputed issues. If an agreement is filed with the court, then a TEDRA agreement has the effect of a binding court order on all individuals with an interest in the trust or estate. If the involved parties cannot come to an agreement, TEDRA also authorizes any interested party to initiate a lawsuit to obtain a resolution from the court. This judicial resolution procedure will follow the same type of procedure as a standard civil litigation matter which involves discovery, depositions, and ultimately a bench trial with witnesses. Ultimately, TEDRA is an efficient procedural mechanism to resolve trust and estate disputes.
Importance of Your Estate Plan
Careful estate planning now is the best way to prevent disputes after you pass away. Although having a well thought out estate plan is not a guarantee against litigation, it is still essential to have updated documents that clearly and accurately reflect your intentions. We suggest revisiting your estate planning documents at least every few years to confirm that they are still relevant to your circumstances and that there have been no changes to applicable tax laws. We also suggest reviewing them any time you experience a “life changing event,” such as new children or grandchildren, marriage, divorce, financial gains or losses, death of heirs and/or other diversification of assets and property. If you have any questions regarding the above, our office would be happy to assist.
This article is not intended to replace legal advice applicable to your situation and should be used only for informational purposes. Consult with your legal or financial advisors regarding the suggestions contained herein. Ms. Mignella is an attorney with the firm of Sandra L. Clapp & Associates, P.A., and can be reached at firstname.lastname@example.org or (208) 938-2660.