The on-line version of the Minneapolis/St. Paul Business Journal reported on this phenomenon here, providing national statistics that should be of interest to Florida probate attorneys. The following are portions of the article I found most interesting:
The perfect storm
The reasons for the flurry of trust-and estate-related legal battles are many.
According to an article in the Dispute Resolution Journal, an estimated $41 trillion of wealth will be transferred in the United States from the "Greatest Generation" to their kids, the baby boomers, between 1998 and 2052.
The massive transfer in wealth alone is enough to spur more family feuds, Godfrey said.
Increasingly complex family compositions makes disagreement even more likely. Disputes often arise between children and second spouses as well as between children of different marriages, said Jim Clay, a partner in the Trusts and Estates Department at Rider Bennett in Minneapolis.
That's what's happening in the Anna Nicole Smith case being heard by the U.S. Supreme Court. In that case, Smith is trying to claim part of the inheritance of her late husband, Howard Marshall, a Texas oil tycoon. Smith alleges that Marshall's son, Pierce, destroyed documents, thus interfering with her expected inheritance. Pierce denied the allegations and said Marshall left Smith nothing in his will.
Some lawyers say baby boomers seem much more willing to air their family problems in court than their parents were.
Well-publicized trials also contribute to the rise in demand for estate litigation.
In the Binger case, the family disputed the former Honeywell chairman's decision to amend his will two months before he died in November 2004 to give about $40 million to $50 million of his $200 million estate to Jane K. Mauer after his death. Mauer was his family's wealth manager with whom he also had a close personal relationship. The family objected to that gift, arguing that Mauer manipulated Binger into giving it to her. Mauer says that's not true. Dorsey & Whitney attorney Greg Weyandt, a member of the firm's trust-and-estate litigation practice, represented the Binger family.
"I've gotten calls from people who said they read about some other case in the newspaper and it made them think they may have a claim," said Alan Silver, a litigator with Minneapolis-based Bassford Remele.
Lack of trust in the trustee
Disputes among family members -- or families vs. other beneficiaries -- aren't the only conflicts spilling over into the courtroom.
Battles between beneficiaries and trustees are becoming increasingly common.
The economic downturn of 2001 seems to have had something to do with the popularity of this kind of case.
"We had a significant decrease in the market and if trustees didn't have a diversified portfolio or weren't doing everything they should have been doing as trustees, there's always the potential of being sued by beneficiaries," Clay said.
A classic example of this kind of dispute is the clash between the heirs to the Minneapolis Creamette fortune and Lowry Hill, the trustee to the 48-year-old family trust. In that case, the family of Creamette founder James T. Williams, represented by Silver, alleged that Lowry Hill failed to properly manage the trust's stock portfolio and caused a $13.3 million decline in the value of the trust. Lowry Hill officials maintained they handled the trust prudently. The trial court awarded the Williams family $5.4 million plus attorneys fees and return of trustees fees. The Minnesota Court of Appeals set aside the award and sent the case back to the trial court for further proceedings. The parties ultimately resolved the case out of court on a confidential basis.
Beneficiaries also may sue a trustee for failing to properly execute the orders of a trust.
Silver litigated one such case that was decided by the Minnesota Court of Appeals in 2004. In that case, Ruben Divine left his assets to his son, Perry, and to his wife and left strict instructions as to how that money was to be distributed. Perry Divine argued that the trustees abused their discretion in allowing the distribution and took them to court, but a Ramsey County District Court judge disagreed with Divine. Divine tried to get that decision reversed by the Court of Appeals, but failed.