Trust and estate attorney Michael Hackard Trust and estate attorney Michael Hackard.

Mega-estates of fabled billionaires are far from the merely inheritances subject to ugly family feuds. Indeed, litigation over family unit riches is more than mutual than imagined — in detail, nasty collisions between stepmothers and stepchildren, where the deceased husband suffered diminished cognitive capacity.

Veteran estate and trust attorney Michael Hackard has represented both sides, and in an interview with ThinkAdvisor, he discusses how fiscal advisors can help avert such emotional, vengeful battles.

The lawyer'south new book, "The Wolf at the Door: Undue Influence and Elder Financial Abuse" (Hackard Global Media), illuminates the way tensions in composite families tin lead to hideous inheritance disputes. Net profits from the volume'southward sales will be donated to the Alzheimer's Foundation of America.

Almost half of Hackard's contempo disputed manor cases take involved litigation between stepmothers and their stepchildren. In contrast, such deportment apropos stepfathers are merely a small fraction of those, he says.

Composite families of biological offspring and stepchildren frequently become enmeshed in such overwrought manor fights, though litigation also ofttimes occurs when one spouse — typically the stepmother — has no genetic children.

Cognitive decline or other vulnerability of the nugget-decision-making parent — because of severe concrete illness, isolation, abandonment fears, or other conditions — set the stage for undue financial influence exerted by a family member or caregiver. For example, deathbed asset transfers are common.

ThinkAdvisor recently interviewed Hackard, founder of Hackard Law, speaking from his office near Sacramento, California. Amongst other takeaways: the protocol he developed for investigating undue influence in the presence of cognitive harm and his take on the Financial Industry Regulatory Authority's new dominion addressing fiscal exploitation. Here are excerpts from our conversation:

THINKADVISOR: You write about "the dementia gambit"  enabling someone to take control of a family'southward fortune by undue influence and an act that's common in heated stepmother-stepchildren disputes. Why are they "gambits"?

MICHAEL HACKARD: The wrongdoer, or the undue influencer, thinks the adventure is worth information technology because the elderberry doesn't have [mental] chapters or is vulnerable for some other reason. They feel they'll never get caught, so they have a "finders-keepers" attitude.  There's virtually a confidence level that they're not going to exist challenged.

To what extent practise your cases involve litigation between a stepmother and her stepchildren?

I meet a high incidence. In fact, my largest cases – viii-figure cases — are stepmother cases. Often in that location's a dementia chemical element to the decedent'due south [condition] and certainly a vulnerability element. Ane percent of people age 65 have dementia; and by the time yous get up to age 85, 30%-45% of all people accept it.

You say that often, an developed kid will claim, "My stepmother took all my begetter's assets while he was in the infirmary!"

Deathbed transfers [of assets] are pretty common considering of the [sick] person'southward vulnerability. Right now, I have a Russian helpmate case where that claim has been made.  Some states have laws that are helpful to the [estate] challenger considering it's considered that the stepmother – or stepfather – has breached a fiduciary obligation they owed to their spouse not to take advantage of them.

Why is there so much conflict between stepmothers and stepchildren over the married man's estate?

If the stepmother has no genetic children, the trend is that she wants all the avails for her benefit. I've seen many times that even though the father named his genetic children as rest beneficiaries behind the stepmother, the stepmother goes through whatever assets remain for her own do good. Maybe she remarries and takes three trips around the world every year and has houses all over the place.

What if the stepmother has genetic children?

It'due south axiomatic that people favor their genetic children [over stepchildren]. So when the husband dies, generally the stepmother favors her genetic children.

Sounds similar a scene where all hell could interruption loose.

It does because it doesn't take long to see that the stepmother will favor her own children, and that feels like a betrayal to the father'south genetic children.

What tin complicate the situation further?

A dependent kid that'due south a substance abuser who lives in the parents' house, has no job and survives off their income often volition tell the [incapacitated] elderberry parent, "If you don't exit everything to me, I'm moving out — and you'll have no i to take care of you and volition have to go to the quondam people'due south abode." We get this ane a lot.

What other complications tin can there be in stepparent marriages that trigger estate disputes?

In that location's probably a higher percent of no-contact children in stepparent marriages. No-contact children get disinherited past a [more] pregnant percentage [than others].

Is there anything a financial advisor can practice to help clients avoid such legal disputes?

To starting time with, they should exercise manor planning. Some trusts are gear up up so that at the first [spouse's] death, half the decedent's trust becomes irrevocable; the other half, the survivor'due south trust, is commonly revocable. But what ofttimes happens is that at the start death, the trust doesn't go funded because the decedent left his spouse, the stepmother, with full control over all avails at his death and she retains power over them.

Surprising that happens often!

Aye, information technology happens with some regularity. I take a example right now in which when the husband passed away, and half their combined assets of $6 million in securities were supposed to be in an irrevocable trust, the remaining assets to be in a survivor'southward trust that could be revoked — changed — [but wasn't funded].

Can a financial advisor aid to avoid estates battles down the route when a human with children from a previous relationship marries a woman with or without children?

They could create a mutually irrevocable trust that designates the beneficiaries, such equally the children. That locks information technology in.

What might not work every bit well?