Mediation As a Proactive Estate Planning Tool
Mediation is often seen as a tool to resolve formal litigation. In reality, there is no end to the creative ways mediation can be used to proactively resolve conflict outside the confines of litigation—for example, between employees in the workplace, divorcing partners who wish to amicably divide assets and resolve custody without the courts, or even a feuding married couple that both kept their last names when they married and now disagree on the surname their first-born will take (true story, my own).
WHY MEDIATE ESTATE PLANNING DISPUTES?
Mediation is particularly impactful as a proactive tool for estate planning attorneys—to keep the peace among family members and more quickly and effectively reach resolution on issues that would otherwise end up in litigation. Perhaps a parent wants their kids’ input on which part of their estate they would like to inherit so there are no surprises after death. However, the kids may all want the same property or asset, each feeling that they are entitled to it. Mediators can be used proactively to find points of consensus, perhaps by exploring with the parties the psychological or emotional significance of an asset that is making the conflict intractable.
Estate Planner Anna Michnicka, founder of Michnicka Law, said that engaging a mediator at this early stage can ensure a “more democratic and transparent process” in divvying up the estate. Less objections would surface after the fact, and using the courts to resolve the issue may mean an inordinately long delay to resolution.
Estate planning attorney Kirsten Howe, founder of Absolute Trust Counsel, said another time that mediation might be used proactively is if a parent plans to bequeath something to the kids, like a family business, that requires cooperation and frequent interaction between the siblings. Howe said sometimes in the parents’ minds, they envision that the kids will own a business or house all together and be happy, when in reality, there is a long history of conflict among the siblings that indicates this is not a good idea without clear boundaries and parameters. Howe said mediation might be useful in such a case in figuring out a compromise that satisfies the donor’s intent and sets clear boundaries, allowing for less conflict among the children.
Trust, estate, and fiduciary litigator Rob Epstein, Partner at Epstein, Holtzapple, and Christo, said that using a mediator upfront is an ingenious idea because estate plans often “do not contain a lot of rationale and leave big questions.” Sorting out these ambiguities only after a person has passed, and when there is a squabble among the beneficiaries, can be a recipe for chaos.
Who Makes A Great Estate Planning Mediator?
In terms of the qualities that make a successful mediator in the above scenarios, Michinka said it is paramount to find a mediator who understands what matters most in family disputes: finding a solution that not only resolves potential legal issues but also allows families to remain in good standing with one another. That means the mediator should also consider how administering the estate plan will impact family members’ relationships with one another. Howe said that, sometimes while the plan is being administered, there is one beneficiary “determined to cause trouble,” possibly by filing a petition to challenge the plan. A good mediator, Howe said, knows enough about estate planning to be able to discuss what the judge will do if an estate plan is challenged. However, Howe noted that given the complexity of family dynamics, the parties must be ready and willing to find solutions because “if someone is determined they are not going to compromise, it won’t happen.” Howe said that a good mediator can make an agreement happen “faster and easier,” than it would otherwise, but ultimately resolution must come from the parties and their commitment to finding a solution.
Epstein agreed with this idea, relaying that a good mediator in estate planning conflicts does not necessarily need to know the area of the law well so much as understand the complexity of interpersonal dynamics among families. Epstein said that a talented estate planning mediator has “the ability to listen; not be judgmental, not be hooked by personalities; has good positive energy and patience; and is able to acknowledge what people think and feel without showing that as agreement with their position.” Epstein said sometimes conflicts do not resolve among families because the litigation is the one thing left that is binding the parties together. Epstein said that for the conflict to resolve, the parties’ commitment to remaining in the conflict must soften. Epstein discussed a mediation he conducted among siblings who were estranged. Epstein said that ultimately, to find a compromise between the parties, he shuttled back and forth sharing positive comments they relayed about the other (which Epstein had skillfully elicited, and then shared as if they somewhat spontaneously arose). In this way, enough goodwill was generated that the parties’ iron-clad commitment to stay in conflict gave way to an intention to resolve the matter.
These are just some of the endless creative ways that mediation can be used in estate planning to convert a seemingly zero-sum interaction into one in which both parties gain. All areas of the law may be served by the mediation process: estate planning is only one of the arenas in which this is true. However, given the complex nature of family dynamics, mediation has particular potential to transform the estate planning field—not only by resolving possible or actual litigation, but also by healing the dynamics of the conflict itself, long before the need for litigation arises.
Author: Diana Maier, Partner.
This article has been prepared for general informational purposes only and does not constitute advertising, solicitation, or legal advice. If you have questions about a particular matter, please contact the Maier Law Group directly.