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Capabilities

Settlement Protects Trust From New Claimants

 
February 21, 2017
 
Case Study

Situation

A decedent revised her revocable trust to pour over at death to a new revocable trust that named substantially different individual and charitable beneficiaries than the original revocable trust. A friend of the decedent who was a beneficiary of the original trust but not of the new trust threatened to sue for undue influence and lack of capacity. The friend supplied a draft petition in support of those claims.

Result

We negotiated a settlement with the friend that preserved the estate plan under the new trust. The settlement was confidential, which prevented the friend from notifying other former beneficiaries who might want to join the suit to preserve their bequests. One factor favoring settlement was a state law providing that a proceeding to contest the validity of the new trust could not commence more than two years after the decedent’s death. The desire to settle was enhanced when we were able to get various beneficiaries under the new trust to share in the settlement.