Litigating for a Legacy…

Most estate planning is centered around a few important goals: preserving as much of your estate for your heirs as possible, easing the transition of your assets, and preserving positive memories of your life.  In most cases, a properly drafted trust can accomplish most of these goals.  For example, by paying attention to the need for financing medical care with Medicaid (Medi-Cal in California), Medicare, VA Aid & Attendance Non Service Connected Disability benefits, personal funds or some combination of methods, you can preserve estate assets.  Determining whether a QMap or QVap Trust is appropriate for you can add flexibility to your property management.

Properly drafted estate planning documents help avoid litigation as well.  Confusing or poorly drafted documents create tensions over the true meaning of the documents and your intent.  These sorts of family squabbles are almost always avoidable.  However, there are cases where litigation is unavoidable for various reasons.  Protecting a family member’s reputation or product is frequently a matter of estate litigation.  As with many estate litigation snafus, one need only look to celebrity estates for an example.  Recently, there has been no shortage of celebrity estate litigants.

Pearl S. Buck, the author of The Good Earth, among other novels recently had an odd discovery made in her estate: a previously undiscovered manuscript.  Evidently, an unknown person absconded with the handwritten manuscript.  Eventually, it was discovered by a person who buys and sells storage units in Texas inside an abandoned storage unit!  Although actual litigation was avoided, Ms. Buck’s son who serves as the manager of her literary estate paid the person who found the manuscript.

Most recently, the estate of Joe Paterno announced pending litigation against the NCAA over the Jerry Sandusky child molestation scandal.  As a result of the scandal, the NCAA imposed drastic penalties against Penn State University, including stripping the school of a number of football victories and, consequently, Coach Paterno of his title as the winningest college football coach in history.  Similarly, Michael Jackson’s estate has been in ongoing litigation since his death over, among other things, his reputation.  Most recently, the estate has been sued by an individual alleging molestation, which the estate decries as baseless claims.

When such issues arise, the joint goals of an estate plan may be pitted against each other.  Litigating the claim, for example, may be essential to preserving the decedent’s reputation as in the cases of Coach Paterno and Michael Jackson, or the decedent’s work product, as in the case with Ms. Buck.  In these cases, however, substantial estate assets may be exhausted in the effort.  Your trustee or executor will be required to determine what claims to litigate and which to settle.  As a result, where a business is part of the estate, or where intellectual property rights are implicated, the representative ought to be someone who understands the nature and importance of the assets involved.  When lawsuits can’t be avoided, it is knowing when to settle, when to litigate, and how the choices will affect the estate’s remaining assets, the transition of assets and your memory that may determine the success of an estate plan.

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