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Family Contracts

Family agreements can often be some of the most confusing areas that we deal with as trust and will litigators. The reason is that when families agree to do things for one another, they tend not to document the agreement in writing. They don’t think of the family agreement as a contract in the sense that buying a car is a contract, or buying a house is a contract, or entering into a contract for a new pool with a pool contractor is a contract.

Enforceable Contracts

There can be enforceable contracts to leave an estate to somebody. If your parent says to you, “Please come live with me, quit your job, give up your house, take care of me. And if you do that, in return, I will leave you my house, or I will leave you everything I have.”  That technically is an enforceable contract. It’s an agreement, just like any other contract.

The problem is that most people don’t document that type of agreement because they don’t feel the need to have to make their parent sign something in writing.  It just seems awkward. It seems out of place. It seems strange. Why would you have your parent do that? Do you not trust them? That would be the implication that somehow you don’t trust each other.

But the problem is that once the parent dies, if one of your siblings or some other family member wants to come in and fight you about what you’re supposed to receive, they have a pretty good case because you have to prove your contract in order to enforce it. If it’s not in writing, you have to prove your contract by clear and convincing evidence, which is a higher evidentiary standard than you normally have to use in lawsuits.

Importance of Having Written Agreement

So trying to enforce an agreement with family members can be very tricky.  The best way to do it is to document it in writing, or at least have something to back it up. If the parent says, “Come take care of me and I’ll leave you all of my property,” then the parent really should do a new trust or will that says, “I leave all my property to this child who moved in with me and is taking care of me.” That way, at least that agreement is backed up by action.  You’re actually named as a beneficiary. But if you’re not named as a beneficiary and you don’t have a written contract, you still may be able to enforce your agreement. But it’s going to be much, much harder than it would be if it was documented.