Cecil Harvell and Wes Collins from Harvell & Collins discussed the complexities and common issues arising from joint bank and investment account registrations with survivorship designations, which often override wills and cause family disputes after death. They emphasized the importance of clear communication and careful estate planning to prevent unintended asset distribution and highlighted that litigation, though costly and emotionally taxing, can resolve disputes when accounts are improperly changed or challenged. The speakers urged listeners to be aware of these non-probate assets and seek legal advice early to avoid conflicts and protect their true estate intentions.

Common Issues and Conflicts

• Problems from both sides: children/heirs surprised by accounts passing solely to one beneficiary, and others defending the intended beneficiary against challenges.

• Casual execution of account designation documents at banks contributes to disputes.

• Accounts pass outside of wills, governed by the institution's internal documents, sometimes overriding the last will and testament. [01:15]

Litigation Arising from Disputes

• Litigation often results from these disputes and can be emotionally and financially draining for families.

• Cases involve investigating mental capacity of the account holder at the time of designation changes, possible undue influence, and technical validity of executed documents.

• Litigation can successfully resolve the issue when there is evidence of mistake or incapacity but is an undesirable route. [06:35]

Importance of Communication and Planning

• Emphasis on open communication between family members and careful planning to avoid conflicts.

• Use of power of attorney to manage financial matters can negate the need for joint account changes.

• Discussion about educating clients on non-probate assets and periodic review of beneficiary designations to maintain consistency with the estate plan. [03:30]

Nature of Non-Probate Assets and Override of Wills

• Explanation that accounts with designated beneficiaries pass outside of wills and do not become part of the probate estate.

• Beneficiary designations on annuities and life insurance take precedence over wills.

• Responsibility lies with account holders to manage these designations carefully as attorneys cannot change them without client authority. [09:30]

Ease and Risks of Changing Account Designations

• Changing account registrations or beneficiary designations is simple and sometimes done without sufficient understanding or oversight, even by power of attorney agents.

• Potential for changes with little formal process (e.g., signing at a bank, telephone changes) increases risk of unintended consequences.

• Existing statutes and legal principles complicate these situations further, sometimes allowing accounts to pass inconsistently with the overall estate plan. [10:45]

Role of Medical Evidence and Undue Influence in Litigation

• Medical records and evidence about the mental state of the account holder at the time of changes are critical in disputes.

• Bankers’ testimony and procedural irregularities of document execution can impact the cases.

• Cases often require complex evidentiary assessments and may rely on doctrines like the North Carolina dead man statute. [07:50]

Practical Advice and Public Awareness

• Raising awareness to enable families to avoid costly litigation.

• Encouraging clients to regularly review their estate plans along with all beneficiary designations and account registrations.

• Highlighting importance of proper documentation and legal guidance to align non-probate assets with overall estate intentions. [12:00]