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Litigation can make private estate administration matters public

Litigation, by definition, is contentious. Any Moorestown resident who has been involved in legal dispute knows how adversarial the process of going to trial can be. Lawsuits and the hearings that follow their filings do not exist without prior disagreements; in the case of estate administration matters, those disagreements can put private financial information at risk of becoming public.

Lawsuits throughout diverse jurisdictions can become part of the public record as they are heard in public courts. As such, when privately held trust and estate planning matters are litigated, the legal door can open to allow closely-held information out of the bag. Litigation can result even when the parties to private trusts, wills and other testamentary devices sign nondisclosure agreements about protecting the information contained in those documentary items.

A recent report about this serious topic discussed the publication of the private estate matters of a newspaper mogul. His children initiated litigation regarding his trust because they believed bad accounting practices were used to deplete the fund; as a result of their lawsuit, information about the trust's value was made public and available to many with no interest in the matter.

In many areas of law, litigation is a matter of last resort. That can be the case in the estate planning and administration realm as well. Many individuals work to protect their wealth and the beneficiaries who will receive it after the creators' deaths through carefully drafted testamentary tools. However, not all stand up to the evidentiary requirements of civil litigation procedures. A lawsuit can put even the most carefully drafted trust or estate plan at risk of becoming known in the public domain.

Source: The Wall Street Journal, "To Keep Trusts Private, Estate Planners Avoid Litigation," Anna Prior, May 12, 2015

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