All these items factor into who receives the property in the estate. But what happens if a decedent leaves behind conflicting or inconsistent estate documents? The heirs and beneficiaries likely will have to ask a court to resolve the resulting legal issues. It’s a costly and time-consuming mistake you can avoid for your estate by taking the right steps now.
It is a rare occurrence for a decedent to create inconsistent estate documents intentionally. But it happens accidentally more often than you might think.
Most often, the conflict arises when the decedent’s Will provides for distribution of an asset to one beneficiary, while another document transfers the asset to a different person. The second document can be a trust, asset account, beneficiary designation, or title document — or even a later Will that does not validly revoke the first Will.
For example, assume that a person creates a Will leaving the family home to one of their children. Then, at some later time, the person executes a deed to the property changing the title to a joint tenancy with a right of survivorship, naming a different child as the joint tenant. At that point, the provisions of the Will and the title to the property are inconsistent with each other. A single property is designated for distribution to two different heirs.
Inconsistency can arise with more than real estate titles. If financial accounts or assets have transfer-on-death or pay-on-death designations, the TOD or POD designation should be consistent with transfer provisions in other testatmentary documents, such as a Will or trust. But sometimes, they are not. Similarly, beneficiary accounts like insurance policies or retirement accounts can have a named beneficiary other than the person(s) named for the asset in a Will or trust.
Conflicts also arise because of inconsistent provisions in legal documents executed at different times. Even a Will and a trust can be inconsistent with each other, which can lead to substantial legal issues.
These situations usually arise because a person takes conflicting actions at different points in time. They may not recall the initial disposition or have an inaccurate recollection about it. Or, they do not consult a lawyer when creating documents, assuming that previous documents are automatically revoked — which often is not the case. As people grow older, the incidence of conflicting documents is likely to increase, because the document execution may be separated by many years — or even decades — which creates a greater risk of inconsistencies.
If conflicts in estate documents are not discovered until after a person passes away, it may be necessary to ask a court to address the inconsistencies. When that occurs, lawsuits involving the estate consume assets and can take a lot of time (even years) to resolve.
In addressing conflicts or inconsistencies in estate documents, a court follows specific rules established by statutes and prior case law. The outcome in a specific case depends significantly on the nature of the conflicting documents and the type of asset that is involved.
In the example above, where the person’s Will and real estate title are in conflict, the likely result is that the joint tenant on the title receives the property — and the beneficiary in the Will receives nothing. The reason is that the joint tenancy with a right of survivorship operates to transfer the property to the surviving joint tenant immediately on the death of the joint tenant who changed the property title. A different result may occur if the circumstances create legal issues that prevent the automatic transfer or invalidate the title change.
The only way to ensure that your estate does not end up with inconsistent legal documents is to have help from an estate planning attorney when you create your estate plan, as well as after the plan is in place. When you make an estate plan, your lawyer makes certain that all your documents are consistent, including asset accounts, titles, and beneficiary designations.
Besides updating your estate plan when certain events occur, you should always consult your lawyer when you sign any legal document that affects your property interests, even if you don’t think it affects distribution of your estate. Your lawyer will make certain that all your estate and legal documents stay consistent with each other and do not create conflicts in your estate.
Preventing inconsistency in estate documents is another of the many reasons that you should never attempt to create your own estate plan or prepare legal documents without assistance from an experienced lawyer. You may save a few dollars taking the do-it-yourself approach, but your loved ones might have to cope with the expense of lawsuits and delay in property distribution after your death if you unintentionally create legal documents that conflict with each other.
At Peterson Law Offices, estate planning is a focus of our practice. We provide top-quality services at affordable prices. If you already have an estate plan, we can review your plan and all your related asset and property documents to ensure consistency. If you don’t have an estate plan, we help you put one in place that fully addresses your needs and goals, while making certain that all your legal documents are consistent with each other.
We welcome inquiries from clients throughout the East Valley, including Queen Creek, San Tan Valley, Gilbert, Mesa, and Chandler. Schedule your free initial consultation by calling 480-878-5998 or using our online contact form.
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