Trust, Wills and Probate Mediation – Four Key Considerations
by Lauren McGuirl
Over the last 30 years, CEDR has worked with many families to resolve disputes concerning the division of assets following the death of a loved one.
These disputes involve challenges under the intestacy rules, questions over the validity of a will and challenges to trustee’s authority. In the last 18 months we have seen a rise in disagreements between beneficiaries to trusts and wills due to the pandemic resulting from an increase in unexpected deaths related to COVID-19 or reduced access to healthcare.
Presently, we are seeing more cases where either arrangements were not put in place or where the room for difference in interpretation of the deceased’s wishes arise.
Most mediations end in settlement on the day or shortly thereafter (93%) and this is certainly true of Trust, Wills and Probate (“TWP”) disputes. Whilst every dispute is unique, there are many similarities we have observed in helping the parties in TWP disputes find their way to resolution and closure.
Experience has taught us the two main objectives in settling a TWP mediation are:
- addressing disagreement over the financial and property assets and resolving any charges to the deceased estate.
- ensuring the family and heirs, as well as those around them, achieve closure, address new or existing personal issues and end legal and familial battles.
While working towards a settlement, there are four key considerations:
- Asset Division
- Legal Issues
- Personal Concerns
There are numerous ways for disagreements to arise over an estate or trust, such as objections raised by a second spouse, the children of the deceased, the deceased’s carer, a charitable beneficiary or even the managers of a financial trust.
All of which must be considered within the legal framework and associated rights of the parties concerned.
However, disagreement over points of law and especially impassioned beliefs over what is “fair”; means that much work needs to happen to achieve acceptance and resolution.
In a TWP mediation, an experienced mediator will enquire as to the practical needs of the parties in a settlement, as well as the value placed on the assets. Such value is often not just financial.
In fact, one CEDR mediator recalls a dispute between doctors, professors, diplomats and politicians who were arguing if they could receive a few hundred pounds each from a grandparent. For these individuals it was about what the money represented and it was this issue that prevented them from moving forward to a deal.
In this context is helpful for all mediation participants to understand that assets or property can have a varying range of values to those involved whether it be a stake in the family business, living in the family’s home, or even simply a new car or a vacation funded by the deceased’s estate.
Understanding such needs can open the door to finding potential options, possibly reveal an easy concession, or even provoke a shift in perception by the other side.
All of these tools may help lead to settlement which addresses not only the legal but also the emotional issues involved in the dispute.
Many sophisticated solicitors ask these questions of their clients’ needs, but this only provides one side of the dispute. Without understanding the whole landscape of the dispute, including the other side’s perspective, makes it difficult to make progress. This is why the mediator’s role is so important to discovering the elements that point to resolution as an alternative to trial and prolonged deadlock.
It can be difficult if the family home or fortune is split between multiple families of the deceased, after the death of the parent.
The mediator can help the children see difficulty in waging a legal battle whilst also encouraging the second spouse to make statements, gestures and overtures that let the first family know that whilst there might not be friendship, there can be an amicable ending.
The reverse can be true for the end-of-life companion who was never formally made part of the family to receive some settlement and/or acknowledgement while not achieving all that a legal spouse might have had.
Legal advisers play a valuable role when they accompany parties to a mediation, as understanding legal rights, interpretations and the alternative of going through the court process are important for the parties to hear both in and out of mediation. This information can land a lot better when coming directly from one’s own legal advisor to help the parties assess whether it is better to make a deal or carry on fighting based on the progress taking place on the mediation day.
For example, those who work with TWP disputes know it can be a nightmare to dissolve a Trust and therefore where they can be an agreement it is often in the best interest of all beneficiaries to maintain its financial integrity.
Family is a huge part of our identity and we carry that with us all our lives.
When a dispute occurs over a deceased family member’s estate it often has a huge impact on the individuals concerned. This is why in TWP mediation, the mediator sees elements of life that few other commercial disputes experience and even things that would never get mentioned in court.
The mediator may learn about “family injustices”, such as hearing about the perceptions of who was thought to be the favourite child. The mediator may discover the huge degree of hurt that results when a carer or a more distant family member becomes the greater beneficiary of their parent’s will.
With these highly personal elements coming to the fore, it is not surprising to see other behaviours surface. It is not uncommon for family heirlooms to be held hostage as leverage in negotiation or even the whereabouts of the deceased’s ashes and whether they have been scattered.
The flexible nature of mediation means that such issues can also be covered in the process and can also be instrumental in assisting the progress of a settlement.
Generally, mediation is known as a technique that can repair broken relationships and this is true even in TWP disputes.
However, that does not mean that it does or should happen in TWP disputes.
Experienced TWP mediators know that the path to a resolution may be about drawing in a line under fraught relationships rather than unrealistically mending a lifetime of hurt. It is great when, for example, the mediator gets cousins talking again and willing to reunite at family gatherings, but it can be equally important that the mediator will help an aggrieved son or daughter or a bullied sibling see an end to the fighting and so move on with their lives.
Mediators will often talk of the personal satisfaction they feel at helping the parties make a deal. A Mediator in a TWP dispute would say that for them it is about being able to end to the financial and legal dispute and give the parties the ability to move on with their lives, recognising that the pain of the difficult past relationships need not travel with them into the future.
Recognising the complexity and requirements of TWP disputes CEDR put together a free guide for solicitors to help plan and attend a TWP mediation with their clients.