Avoiding Costly Family Litigation
It’s an unfortunate consequence of wealth that it occasionally causes conflict within the family that escalates to family litigation. In working with families of great wealth, I’ve seen my fair share of problems that, from the outside, seemed easily resolvable but resulted in years (yes, years) of lawyers, depositions and costly legal fees.
But what if the root causes that led to that escalation were preventable? What if a few simple, but mindful practices that your single family office can take now will help you avoid potentially costly situations down the road? In creating the Single Families Video Project, Video 3 on Family Litigation, that’s just what I and a panel of experts set out to explore.
In my experience, we see families and their SFOs spending a lot of time on planning and documentation (e.g. estate taxes, finances, etc) and the mechanics of wealth transfer and far too little time spent preparing the family members and the family culture to endure a great shift.
It’s important to realize that the expression “the best laid plans…” exists for a reason. Because planning and documentation are often removed from the actual human experience and don’t take into account the very real emotions, personalities and relationships that come into play in these events.
Roy Kozupsky of Moses & Singer’s excellent insight was that preventing litigation requires collaboration among all parties, not just individual family members and a lawyer, but outside advisors, SFO executives and more.
When we look at the causes of litigation we see issues that have been developing over time, that might have been prevented by mindful counsel; advisors who really understand how to listen, create a plan that adapts over time and engages ALL the generations of the family. By creating what’s been described as “fair process” and ensuring that the voices of all those affected by planning are heard, we can start to get to the bottom of preventing costly litigation scenarios.
For more insights into understanding and preventing litigation I encourage you to watch Video 3 with Roy Kozupsky of Moses & Singer, Patricia Angus of Angus Angus Advisory Group, Myra Salzer of The Wealth Conservatory and Warren Whitaker of Day Pitney. The video is the third part in the Single Family Video Series and is free to watch when you register as a “Friend of FOA.” I look forward to hearing your thoughts on family litigation and some solutions that you’ve implemented in your family.