An account holder of a brokerage account and the author of a will can designate different individuals as beneficiaries for the same assets. The person named as the beneficiary on a brokerage account usually receives those assets. Assets of a brokerage account can be registered as transferable upon death, according to the Financial Industry Regulatory Authority (FINRA). This registration usually overrides instructions found in a will.
There are cases when parents divide the estate equally between two children. The problem arises when only one child is named as the beneficiary of a brokerage account. In this case, that child would usually receive the entire account. The recipient normally will not have to share their inheritance with their sibling, even if the will says otherwise.
Clear drafting helps prevent these conflicts. Legal professionals like Ellicott City estate planning lawyer Kaitlyn Tauber handle wills, trusts, and probate along with estate and trust administration.
Contests Over the Will Itself
Family members can challenge a will’s validity by claiming the signer was not fully aware of their choices. This kind of claim, along with many other concerns, raises questions about the legality of a will.
A common claim is that an individual was influenced or coerced into making a testamentary gift. If there was a sudden and radical alteration in a person’s will, particularly in the days before that person died, this issue should be explored further.
Poorly coordinated ceremonies, like signing papers in different locations or without the witnesses in the room, can have negative consequences. Handwritten notes in the margins may be disregarded, and a lack of proper witnessing can render even a signed will invalid.
When the Trustee or Executor Misbehaves
Plenty of disputes have nothing to do with the will. Many begin after the funeral, when an executor or trustee takes control of estate or trust assets.
In trust cases, the beneficiaries often want a paper trail of how trust assets were managed, and as part of trust lawsuits, many cases deal with beneficiary claims against trustee/co-trustee accounting of trust assets. A beneficiary lawyer helps trust clients address issues like trustee breach of duty, trust mismanagement, and elder financial abuse.
The Consumer Financial Protection Bureau (CFPB) outlines four main duties of a trustee. First, they act in the beneficiaries’ best interest. Next, they must manage trust assets responsibly. They keep trust funds separate from personal money. Finally, they must maintain accurate records. Trustees must also treat beneficiaries fairly when there is more than one beneficiary in the trust.
Most misconduct claims trace back to one of those four. A trustee who borrows from the trust to cover a mortgage mixes personal and trust money, and an executor who sells the family home to a friend at a bargain price may not be acting in the beneficiaries’ best interest. A sibling who stops answering questions about the brokerage statements can raise record-keeping concerns. According to the CFPB, a trustee who breaks these rules can face legal consequences.
Beneficiary Forms That Nobody Updated
Retirement and insurance accounts, along with brokerage accounts that carry a transfer-on-death registration, are usually paid out using beneficiary forms rather than wills. That arrangement keeps them out of probate, which families usually appreciate right up until the form turns out to name the wrong person.
An ex-spouse listed on a decades-old 401k form is the classic example. A child born after the paperwork was filed is another example. The will may treat every heir fairly while the forms tell an entirely different story, and the forms tend to control the money that matters most.
Vague Language and Sentimental Property
A simple sentence in a will can cause disputes. For example, leaving a house equally to three children may raise questions about whether to sell it. Some would ask who pays the property taxes and whether a sibling living there must pay rent to the others.
Even personal belongings can cause family disputes. It could be items that may have little financial value but have sentimental significance. Family members may agree on dividing valuable assets but still argue over sentimental items.
Keeping a Dispute From Growing
Estate disputes don’t have to reach the court to be resolved. Some can be resolved through mediation. Others are settled when an executor or trustee shares records and answers questions. In these cases, legal expenses are reduced.
Unresolved conflicts about estates may go to court. People may even withhold important documents and evidence, which creates a rift and more trust issues among the family.
By properly keeping estate and trust records, executors and trustees can greatly minimize family friction, leading to a lower risk of legal issues.
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