Avoiding Estate-Related Disputes Presented by: James E. Edwards, Jr., Esquire Kelly M. Preteroti, Esquire Ober|Kaler

Fiduciary Litigation is on the Rise WEALTH CREATION ON THE RISE! – Despite major corrections in stock market, many investors have accumulated significant wealth in their investment portfolios. – Real Estate value grew 6.4% overall in The Washington Metro area experienced an even larger increase of 8.8%. – Number of Filings in the Orphans court has doubled and is projected to triple by 2013! 2

3

Nature of Fiduciary Litigation VALIDITY OF WILL OR TRUST/NON- PROBATE PROPERTY – Lack of Testamentary Capacity – Undue Influence/Fraud – Failure to Follow Legal Requirements – Construction or Modification of Document WILL CONTEST: ORPHANS’ COURT TRUST DISPUTE: CIRCUIT COURT 4

5

Nature of Fiduciary Litigation CLAIMS FOR BREACH OF FIDUCIARY DUTY AGAINST TRUSTEES – Trustees Must Exercise Due Care, Diligence, and Skill in the Administration of a Trust. – What Can Go Wrong? Duty of Loyalty Duty to Invest Prudently Duty of Impartiality 6

Nature of Fiduciary Litigation CLAIMS AGAINST PERSONAL REPRESENTATIVE OF ESTATE – A Personal Representative is a fiduciary and must expeditiously settle the estate of the decedent in accordance with the terms of the will and with as little sacrifice to value, as possible. – What Can Go Wrong? Mismanagement of property Unable or incapable of discharging duties 7

Financial Exposure for Fiduciaries Commissions worth the risk to your personal finances? – As a trustee you can be personally liable if you breach the duty of loyalty, duty to invest prudently, or duty to act impartially. – As a Personal Representative you can be charged legal fees for having to defend yourself against removal if the defense is not made in good faith, with just cause. 8

Avoiding Fiduciary and Probate Litigation Dysfunctional Families Second Marriages/Significant Others Nonstandard Estate Plan Poor Estate Plan Lack of Follow-Up 9