Advisors can be caught in the middle when family disputes erupt.

    When it comes to a last will and testament, some people write a will once and never touch it again, while others deliberate, changing their minds and legal documents frequently. Either scenario could lead to a contested will.
    Sometimes, your client is a twice-divorced oil baron with six kids from his prior marriage who just married his beautiful and young secretary, whom he met at the local bar. When he leaves her everything and ignores his six children, you can be assured that a will contest will ensue.
    Almost universally, will contests entangle the deceased individual's financial advisor who, due to the intensely personal nature of financial planning, could know quite a bit about the deceased's intentions. If you are a financial advisor for high-net-worth clients, here is what you need to know to protect yourself and the interests of your clients during will contests.

How Disputes Get Underway
    Disputes generally begin after the reading of the will, when heirs realize that their inheritance is not what they expected. Will contests are governed by state laws, which vary among jurisdictions. However, all states have a finite period of time after probate to contest a will. An attorney should be consulted immediately to learn the applicable deadline. (For example, challengers of a will have only one year from the date the will was probated to contest it in Pennsylvania.)
    Once a dispute is filed, the court generally will consider several factors to determine if a will contest is justified: mental and physical condition of the deceased at the time the will was signed, and his or her historical relationship with family members. The court is looking to determine if changes to the will came at a time when the deceased's decision-making capacities, or testamentary capacity, might have been impaired by mental or physical illness.
    The court will also examine if the will accurately reflects the deceased's relationships with family members, or whether it was the result of a favored beneficiary's overriding influence upon the deceased. For example, if the deceased had a large family and doted on children and grandchildren but left the entire estate to a distant cousin, there could be grounds for a dispute, especially if that cousin had isolated the deceased from other family members. If the disposition of the assets seems unnatural to those who knew the deceased best, then a will contest may be considered.

Medical Records Are Crucial
    Written reports by physicians documenting the medical condition of the deceased play a vital role in determining the deceased's decision-making capabilities.
    The time lapse between when the deceased signed a will and when he or she was examined by a health professional is crucial. Without medical documentation produced near the time that the will was signed, the mental and physical condition of the deceased individual can be disputed. Generally, family members do not have the medical expertise to accurately characterize a person's mental or physical condition.
    To avoid such disputes, estate and trust attorneys typically advise their clients to undergo a professional medical evaluation prior to or just following the signing of a will. Additionally, in almost every state, wills are executed in front of two to three witnesses. If the capacity of the signer is in question, more witnesses are present than are legally required. And, there will usually be a thorough discussion of the will's provisions in front of the witnesses to confirm the signer's capabilities and intentions.
    To protect a client even more, will signings increasingly are videotaped to document the capacity of the signer among the witnesses. Once, I had a client who desperately wanted to disinherit her closest living relative, a nephew whom she despised. We videotaped her execution of the will and she had a gleam in her eye as she faced the camera to explain exactly why she disinherited her ne'er-do-well nephew.

Advisors May Be Compelled To Testify
    Once a dispute is formally underway, document review and depositions begin. Financial advisors are likely to be asked to submit the same type of financial data provided in any estate situation. In addition, advisors may be asked to give background information, such as notes and verbal testimony regarding the creation of the deceased's financial or estate plan or the deceased's desires for the disposition of assets. If you are an estate planning attorney, your conversations with your clients are covered by attorney-client privilege. However, financial advisors enjoy no such protection.
    The court will be interested to hear from those people who knew the wishes of the deceased, including attorneys, accountants and financial planners. Such professionals work with clients who readily express concerns about heirs and their ability to handle large sums of inherited money.
    If your client's estate is in dispute, chances are you might know what your client thought of various family members. As a financial advisor, you are aware of clients' estate plans-information reachable by the courts through subpoena. You cannot refuse to talk without risking contempt of court.
    Financial advisors may be compelled to testify to conversations with the deceased. A common question might be: "What heirs did he say he intended to keep out of the will and why?" Even if you didn't know what was in the deceased's estate plan, you might know your client's thoughts about specific beneficiaries or heirs.
    If you've heard comments such as, "This child wastes every penny I've ever given him," you could very well be compelled to testify to that in court.

Note Taking And Will Contests
    There are two schools of thought regarding note taking when a financial advisor meets with clients, and the use of those notes in a will contest. Either you put everything concisely in writing with the understanding that your notes may be used in court some day, or you do not put anything in writing because, if there are no written notes, you can never be asked to explain in court what you wrote.
    Advisors must use their own discretion. If a client is disclosing something out of the ordinary, then note taking might be warranted. If your client, for example, tells you, "My wife thinks she is getting it all but I'm giving it all to my daughter from my first marriage," you may wish to document this statement.
    If you do keep notes, they must be accurate and clear because those notes may ultimately be the primary source of facts for the parties debating the intentions of a deceased person.

Remaining Neutral
    Because high-net-worth people often travel in small and closely knit social circles, will contests can present financial advisors with some dilemmas: Will disputes may require you to provide testimony for one side of the fight. You may, through your testimony, hurt the interests of some of your clients or someone who knows many of your clients or other referral sources. For this reason, financial advisors may wish to avoid involvement in such disputes whenever possible.
    Furthermore, executors of an estate are required to remain neutral in a will contest because they are not supposed to have any opinion about who gets the assets from that estate. Also, executors are precluded from taking any action that benefits one side over the other. Such neutrality is going to be impossible for the advisor who actually drafted the will in the first place. Such advisors are usually substantially involved in a will contest, whether they want to be or not.

Emotional Situations
    Most will-contest attorneys will advise clients not to challenge a will if the potential return outweighs the legal costs that will be incurred in the battle. Will contests are a very emotional area of law; sometimes evolving into a very expensive rehash of old battles between family members and, say, a deceased's second wife. As a result, return on investment is often not the primary concern. Clients may be willing to initiate a will contest out of resentment toward the deceased, sibling rivalry or old wounds from second families.
    The challenge for financial advisors is to avoid getting drawn into a family conflict. Given that circles of high-net-worth people are often very small, you can lose a great deal of business if you are an advisor who becomes actively involved in a situation that is poorly resolved or combative. Given the constraints of conflict of interest and attorney-client privilege that may preclude you from solving this problem for your clients, the next best thing you can do for your high-net-worth clients is to refer them to someone who can competently handle will contests and thereby minimize your role in these potentially volatile family dramas. 

Charles Avalli heads the Estates and Trust Group at the Pittsburgh law firm of Goldberg, Gruener, Gentile, Horoho & Avalli, PC, which concentrates in divorce and family law and estate planning, including will contests and trust disputes. For more information, please call 412-261-9900.