Incompetent lawyer bungled dad's estate?

What is the name of your state? Texas

Read the last paragraph for the short version of this...

Here is my family's complicated problem (it's long but provides plenty to think about, so read to the end, please): My dad was diagnosed with mesothelioma about a year ago and died approximately one month ago. Before he died he was awarded a very large legal settlement from an asbestos company. He and my mother (his wife) worked with an estate lawyer to set up a will that would bequeath mom and their four adult children (me included) his multimillion dollar estate. His wishes were to give $1 million each to the four of us, to be placed in separate trusts and to be given out over a period of time, although we were to be able to withdraw money for certain allowed expenses such as health, maintenance, welfare, education, etc. He wanted to gift my mother with $2 million outright, no strings attached. $1 million would go to charity and the remaining money and assets would go to my mother.

To avoid tax consequences, the legal settlement directly gave the four children $500,000 each, meaning that an additional $500,000 could be bequeathed upon my dad's death, taking advantage of the $2 million tax exemption and giving us each $1 million totally tax free.

Here is where it gets hairy. For whatever reason (and all beneficiaries agree on this), the lawyer did not write a will that was in accordance with my dad's wishes. The lawyer was not sensitive to the severity of my dad's illness and the very limited time frame in which he had to do his job. When he showed up with the will it left the $2 million that was supposed to be placed in four individual trusts to our mother instead, in the form of family trust that she would use in her lifetime, and if there was anything leftover when she died, only then would our dad's money pass to us as he had intended (possibly much depleted). My dad was incredibly ill at that time and his health was so adversely affected by his worry over the equitable distribution of his assets that we decided not to tell him that the will was wrong. I know it sounds strange, but it was a decision made out of compassion and love for our father, who was suffering so much that we would ease his suffering in any way we could. He was so relieved to have finally signed the will and been done with it. My dad deteriorated so quickly (he died about a week later) after that so there was no time to change the will.

To deal with the lawyer's mistake, at the eleventh hour we went back to the settlement agreement and each child was awarded $1 million instead of $500,000, leaving our mom with the remaining money, as Dad intended.

Unfortunately, the incompetent lawyer did not revise the will and have my mom sign it using her power of attorney, to reflect this change. As it stands, our mother's money is locked up in a family trust, which we all have access to, and not a $2 million gift free and clear as my dad intended.

Since we all agree on my dad's intentions and the lawyer's mistake in improperly executing them, is there any way for all beneficiaries to contest the will together? Or can my mom, as executor of the will and trustee of the family trust, somehow keep us out of that trust and use the money however she wants (which is what we want for her)? If the will is contested, won't intestate laws apply, resulting in possible tax complications for everyone? Any thoughts on this sticky situation? Thx

I don't think there was any "bungling" at all. If the wishes of your father were not appropriately represented by the documents, he should not have signed them. If you thought the documents did not reflect his wishes you should have informed him. That fact alone may destroy any chance for you to have credible testimony to the contrary. (Not that I don' t believe you.) While you may have some remedies to change things based on a number of theories, none of them would be guaranteed. For this amount of money, get an attorney. You will have substantial tax ramifications from whatever happens so you may have high hurdles to jump.

(1) What type of trust is this (living trust, revocable living trust, etc.)?

(2) Is there an actual trust document or just money set aside in a "trust" account?

(3) Did the attorney who drafted the will also draft the trust?

(4) Was the settlement money paid to your father while he was alive or was it paid to the estate or trust after he died?

(5) Was this settlement money put into the trust or into the estate?

(6) Was the charity paid its $1 million bequest?

Mother would not have had the legal authority to use a POA to sign someone else's will--that is illegal. The attorney can not be faulted for not setting up the estate/trust properly when he only followed his client's instructions to the best of his ability, and even then he wasn't fully informed.

BEFORE the children were paid $1 million each, you all should have consulted with (and the attorney should have suggested that you consult with) a certified estate planner (or trust deparment of a bank) to figure out exactly how the trust should have been set up to accomplish the $2 million tax free gift to mom. It's still not too late to get such a consultation to at least see how the remaining assets (is there now $2 million or more in the trust?) could be handled. The instructions of the trust language must be followed explicitly, but your mother as trustee will have a little bit of discretion as to what she can do legally.

DANDY DON IN OKLAHOMA ([email protected])