Considering Family Dynamics In Estate Planning Can Prevent Family Disagreements

November 6, 2020 • By Jack Dooley

Every family is different so estate planning at its best must attempt to recognize the attributes, weaknesses, and relationships of the family members.  A recent non-precedential decision of the Pennsylvania Superior Court provides a cautionary tale even where the plan was uniquely crafted to deal with a particular circumstance.

In the case, a mother, through her will, divided her estate in equal shares amongst her five children.  One of her children, a son, had faced multiple challenges in his life including drug and alcohol abuse, a serious work injury and, at the time of a hearing before a lower court, was living in a dilapidated trailer parked on a friend’s property.  

The mother was worried about her son’s welfare and concerned he would not be able to properly handle his inheritance. She directed that his share be placed in trust with his brother as the trustee. Payments from the trust for the son’s benefit would be made in the trustee’s “sole and absolute discretion.”  Following the mother’s death in 2014, disagreements arose between the brothers over the trustee’s management of the trust. The trustee was reluctant to make his brother’s requested payments from the trust.

The brother filed a petition to terminate the trust. The evidence at the hearing disclosed that he and the brother serving as trustee had been estranged for some time and had not actually spoken to each other since their father’s funeral in 2002.  Despite the language in the will, which gave complete discretion to the trustee, the lower court found that the trustee had breached his fiduciary duty by failing to make requested payments for his brother’s benefit from the Trust, which was valued at over $700,000. The Court ordered the trustee to make a number of requested payments and to pay his brother $5,000 per month provided he submit proof that he was substance and alcohol free. On appeal, the Superior Court generally reversed some details of the order but did make clear that the trustee would be required to make expenditures for the benefit of his brother in the future.

One can imagine the family dynamic in play here. The mother loved all her children but the one son seems to have caused worry throughout the years. In her will, the mother did what she thought would be best to care for that son, but her failure to realistically deal with the relationship between the two brothers resulted in a plan that led to litigation.  Perhaps naming another one of the siblings as trustee or naming two of the siblings as co-trustees would have been a better choice. It is clear that a person who dislikes or is angry with a beneficiary will, in all probability, not deal in an objective and cool-tempered way with that beneficiary.  

The lesson is that a good estate plan is not a “fill-in-the-blanks” process but, rather, a strategy developed after a clear and unemotional review of each family’s dynamic.  A professional estate planner is critical to success.