The legacy of late California Senator Dianne Feinstein was marred by lawsuits filed before her death, revealing rifts in the family and flaws in the estate plans of Feinstein and her late husband Richard Blum. After Blum’s passing in February 2022 and Feinstein’s subsequent health setbacks, the senator passed away in September 2023. Feinstein’s daughter filed lawsuits in her role as agent under Feinstein’s power of attorney, highlighting common issues in estate planning such as “heir wars” that arise in blended families with children from previous marriages.
Heir wars, characterized by battles over an estate among family members, are often ignited by unresolved conflicts and grievances that emerge after one spouse passes away. Many estate planning attorneys have witnessed years-long disputes over issues that seem trivial to outsiders, emphasizing the importance of addressing potential conflicts in estate planning regardless of the family’s wealth. The key action to prevent these conflicts is for parents to anticipate and address possible sources of contention, considering personality differences among family members and potential beneficiaries.
Conflicts can also arise from estate plan details, such as the terms of division of the estate. In the case of Feinstein and Blum, conflicts were built into several trusts, where assets distributed from the trusts benefitted different sets of children based on whether they were from Feinstein’s or Blum’s first marriage. This scenario highlighted the need to identify and correct conflicts among trust beneficiaries to mitigate potential disputes. Implied struggles can arise in estates with property that is challenging to value or holds sentimental value, leading to disagreements over the distribution of assets among heirs.
Communication plays a critical role in avoiding conflicts in estate planning, as heirs should be informed of the estate distribution plan and the parents’ wishes to manage expectations and minimize potential disputes. Estate owners and planners can incorporate tools to reduce conflicts, such as pre-arranging sales or gifts of assets, establishing trusts that authorize diversified portfolio holdings for long-term returns, and detailing the plan for distributing hard-to-value or sentimental assets. Failing to address potential conflicts in estate planning can lead to split families and wasted assets, underscoring the importance of proactive measures to preserve the family legacy and prevent costly legal battles.
