How to Put Your Estate Plan to the Test

Taking a few safeguards can protect your estate plan from legal challenges and guarantee that your objectives are followed out after your death.

A stress test is performed by your doctor to confirm that your heart can still operate normally even when stressed. It’s also a good idea to stress test your estate plan to ensure it can withstand any legal challenges that may arise after your death.

Steps to Put Your Estate Plan to the Test

Take the following procedures to ensure that your estate strategy is not jeopardised by a will challenge.

Include a no-challenge clause. “All wills should contain a no-contest clause that is structured in line with state law,” says Somita Basu, founding principle and partner at Norton Basu LLP in Santa Clara, Calif. “Generally, these clauses say that any beneficiary who contests their distribution in the will is unable to inherit under the terms of the no-contest provision.” This decreases the likelihood of anybody attempting to defy your will. It should be noted that challenge provisions are not applicable in all states, so verify your state legislation.

Document your expertise. “When there is a question of whether the creator was competent enough to execute their agreements, estate plan challenges are sustained,” says Stefanie Trinkl, founder of Trinkl Estate Planning SC in Milwaukee, Wisc. “If you have any doubts about your level of competence to execute a document, such as a brain injury or early dementia, obtaining a statement from your doctor or psychologist confirming that they assessed you and deem you competent to execute paperwork may be extremely beneficial.”

Execute your paperwork in line with the laws of your state. Following your state’s standards for written wills, witnesses, signatures, and notaries precisely reduces the likelihood that someone will question the would’s legal validity. Trinkl advises, “Never have your notary sign as a separate witness, and always have your document signed and notarized by persons who are not linked to you.”

Set up a living trust. A living trust is far more difficult to fight, and Basu points out that “those who are not beneficiaries under the living trust and are not family relatives of the dead are not entitled to a copy of the trust,” which restricts contestability.

Give grounds for the disinheritance. If you are disinheriting a family member who would expect to inherit, including a short explanation in your will is a good idea. According to Trinkl, articulating your cause, such as “a lack of interest they took in your life, or their poor financial decision-making abilities, provides the court proof that the choice to disinherit them was thought out and planned, not merely a mistake or moment of misunderstanding.” This method is opposed by Stephen W. Buckley of Goldstein, Buckley, Cechman, Rice & Purtz PA in Fort Myers, Fla. “If you write anything in the will about why you left someone out that someone may argue about, it can lead to a lawsuit,” he explains. “For example, assume you haven’t seen someone in ten years and are leaving them out of your will because of that. If that individual can claim, “Yes, I saw them last month,” the will is subject to question. It is preferable to mention the individual in the will while indicating that you have decided not to include them without explaining why.”

Consider composing a letter explaining your decision. “Writing a letter explaining your decisions might assist the folks you leave behind understand your thoughts at the time you developed your estate plan,” says Basu. This kind of letter is not legally binding—only your will can decide your wishes—but it might be useful if you are concerned that family will have problems comprehending your choice. If you do compose such a letter, be sure to keep it up to date as your will changes. Trinkl recommends against such a letter, stating that your explanation should be included solely in the will itself.

Give justifications for your choice of guardian. If you are appointing a guardian for a young kid, offer precise explanation for why you picked someone, but keep in mind that the court will make the ultimate decision. Trinkl recommends having “a list of the persons you would NOT want to serve as a guardian and exactly why not” to discourage undesirable relatives from contesting your selection.

Clearly indicate any loans or gifts you received over your lifetime. Trinkl notes that if you do not do so (by declaring gifts on your tax return and generating official loan paperwork), beneficiaries may claim that a gift was really a loan, “reducing the percentage of the distribution due to that beneficiary from the estate.” If it was a loan, it must be paid back to the estate.

Maintain a straightforward approach. “The less space there is for interpretation and legal difficulties, the simpler your will.” A multitude of distribution-related criteria might be difficult to comprehend and enforce. The more complicated your distribution rules, the more difficult the estate will be to run and distribute, and the greater the likelihood of litigation and a breakdown in beneficiary relationships.