The Advantages of Counsel with Dual Expertise in Tax, Trusts and Estates and Probate Litigation

The Advantages of Counsel with Dual Expertise in Tax, Trusts and Estates and Probate Litigation
Riker Danzig Tax and Trusts & Estates Update February 2015

Probate litigation is a unique and growing area of the law.  One New Jersey Surrogate recently mentioned that the number of cases filed in his county nearly tripled over the last few years.  With its own rules, procedures and substantive law, probate litigation is not easily mastered, therefore the litigator with an estate planning and tax law background maintains a distinct advantage in these cases.

In a recent probate litigation, one side was represented by a highly qualified and skilled commercial litigator.  The litigation centered on the unlimited marital deduction, which allows property to pass from a decedent to his or her surviving spouse free of estate tax and without using up any of the decedent’s estate tax exemption amount.  During trial, the commercial litigator relied heavily on his expert witness’ direct testimony.  While testifying, the expert made a misstatement and failed to recognize a certain aspect of the marital deduction as it related to his client’s case.  The commercial litigator, who did not have an intricate knowledge of the tax laws surrounding the marital deduction, never recognized the expert’s mistake and missed the opportunity to rehabilitate his witness.  On cross examination, our attorneys seized on the mistake, discredited the expert witness and created testimony that favored our client.  The commercial litigator’s failure to address the mistake and the tax, trust and estates attorney’s ability to recognize it and use it to his advantage was the turning point of this litigation that resulted in a favorable outcome for the client.

Probate litigation experience also informs the estate planning choices offered by these attorneys and their more traditional trusts and estates colleagues to clients.  The probate litigator’s experience allows him or her to anticipate commonly litigated issues and recommend estate plan features that reduce the likelihood that these plans later end up in litigation.  All experienced estate planners handle unique and complex situations on a regular basis.  When planning is informed by in-depth probate litigation experience, the likelihood of litigation regarding such planning is significantly reduced.

This is especially true for a husband and wife with children from previous marriages.  In one matter a couple decided to have each child share in their combined estate equally upon the death of the second spouse to die.  The couple did not want to take advantage of marital trusts and instead intended to leave all of their assets outright to the survivor and then to all of their children equally upon the death of the second spouse.  This may seem like a simple matter to some planners, but having recently litigated a case on very similar facts, our attorneys counseled the clients regarding the potential pitfalls of their plan.  Two main factors increased the likelihood of litigation: (i) the surviving spouse could alter his or her will after the first spouse’s death in a manner that would effectively void the couple’s current intentions and (ii) the children of the wealthier spouse could seek to contest the will since the equal distribution among all the children would give them less than they might think “fair” given that their parent contributed the majority of the assets.  With previous litigation in mind, our attorneys made several suggestions, including a little-used New Jersey statute that sets forth a method to create a “Will Contract.”  A Will Contract allows spouses making reciprocal wills to enter into a binding agreement that provides that neither party may alter the specific provisions of his or her will.  The Will Contract enforces the couple’s intentions so as to minimize the children’s objections and prevents the surviving spouse from altering his or her will after the death of the first spouse.  While the Will Contract was the choice for these specific clients in their unique situation, there are other techniques that would be available for those not similarly situated.  In any event, planning with a strong awareness of how things may go wrong can only help clients.

These are just a few examples of how Riker Danzig’s Probate Litigation group enhances the services offered to our clients, whether their matters require probate litigation or estate planning expertise.