Parents Should Review Guardian Nominations Annually.
A fundamental principle in life is that things change; as our society becomes more interconnected and technologically advanced, the speed of change seems only to hasten. In response to this change, most of us regularly conduct annual reviews of important areas in our lives. For instance, most large employers review employees annually; many people schedule the traditional annual physical; and most financial advisors recommend annual portfolio reviews. But one area most people neglect a regular review is arguably the one most important: a review of guardianship nominations for their minor children.
The recent loss of musician Michael Jackson has focused attention on this most important issue. Upon his death, there were a number of individuals who could have had standing or a desire to serve as guardian to Mr. Jackson’s children, including Debbie Rowe, his ex-wife and mother to two of the children, his parents and his numerous siblings. Without instructions to the probate court, all of these parties could have petitioned to serve as the guardians. If more than one had petitioned the probate court for the appointment, the matter could have been highly contentious and resulted in an extended legal battle.
Fortunately, Mr. Jackson’s advanced planning prevented the stress and trauma associated with such court proceedings. In his Will, Mr. Jackson designated his mother as guardian for his children and named Diana Ross as a back-up guardian. Mr. Jackson’s decision to nominate these individuals appeared to facilitate the settlement, which was approved by the probate court on August 3, 2009. According to an article in the Los Angeles Times, “Neither side made any demands that were rejected, the source said, and the arrangement was agreed to without contentious negotiation.” In short, Mr. Jackson’s plan appeared to have worked as it should have and his children will be raised by Katherine Jackson, the guardian he designated in his Last Will and Testament.
In selecting guardians, most people designate those individuals they believe will best be capable of raising their children in their absence. But as time passes, circumstances change: couples divorce; parents age; and people relocate. When was the last time you reviewed the guardians for your minor children? Are you still close to the guardians? Do you still believe that they share your values? Are your nominees still healthy and capable of raising your minor children? If you cannot remember the last time you reviewed your guardian nominations, or who you nominated, it is time to review your estate plan.
Adjusting Your Expectations
I was speaking with a dear friend recently who consulted me about a concern she had regarding “her” inheritance. She explained to me that her grandparents, who were quite wealthy, had always led her to believe that she would receive a substantial bequest. As it turned out, the entire estate had been left first to another relative with the unwritten ‘understanding’ that the remainder of it would be subsequently distributed among the grandchildren. Unfortunately, the manner in which the distribution had been made gave her relative complete power over the estate with no binding obligation to leave anything to my friend or the other grandchildren. The grandchildren were now waiting for ‘their inheritance’ from their senior relative which created an atmosphere of uncomfortable tension among the grandchildren.
As a trust and estates practitioner, my friend asked me what could be done to protect ‘her inheritance’. I had the unfortunate job of explaining to my friend that under these circumstances there was little that could be done because given the way the estate plan had been structured, she had no right to ‘her’ inheritance. Unfortunately, my friend’s attitude is not unusual.
Many people are surprised to learn that, with the exception of a spouse and minor or disabled children, there is generally no ‘right’ to inherit. In California, a person retains the right to dispose of property at death as he or she chooses. Generally, as long as proper formalities are observed and the parent or grandparent has adequate capacity, he or she is free to dispose of his or her assets in any manner—no matter how bizarre the testamentary decision. A recent illustration of such capriciousness was Leona Helmsley’s decision to disinherit her grandchildren and instead leaving millions to her dog Trouble.
Moreover, in the absence of fraud, undue influence or competency issues, there is little chance the court system will remedy your perceived slight. In California, will or trust contests are disfavored proceedings with rigid evidentiary requirements; a relatively low percentage of contests are successful. In fact, a challenge to an estate plan is one of the few areas where the California Legislature has eliminated the right to a jury trial.
Are you ‘expecting’ an inheritance? Without a formal and binding contract, you have no legal right to your expectation. In most instances an inheritance is a gift, not a right, and you should consider adjusting your expectations.
