Topic: Estate Planning
Estate plans are set up to ensure family members will be provided for after a loved one passes away. Unfortunately, in spite of the decedent’s best intentions, disputes involving a family inheritance can tear a family apart. Family estate disputes can be caused by a number of issues. Disputes can arise over an inheritance due to long-standing family feuds, the unhelpful advice of significant others, or simply because there is a significant amount of money at stake. Disputes can also tie up property and assets for years. However, with proper planning, you can reduce the risk of family inheritance disputes. Below are five points to consider when preparing your estate plan to help avoid future family inheritance disputes.
1. Set up an estate plan sooner rather than later.
The first mistake people typically make is not setting up a comprehensive estate plan in the first place. Many people, often young healthy adults, avoid setting up an estate plan because they do not anticipate needing one anytime soon. However, the best time to set up an estate plan is when you are of sound mind and sound body. If age or illness makes it difficult for you to communicate, your estate plan may be more susceptible to being contested. For example, family members may claim a caregiver had undue influence when your estate plan was created, or that you lacked testamentary capacity when you signed your will. A comprehensive estate plan that has been in place for years is less likely to be contested based on questions over the individual’s state of mind.
2. Consider a living trust to provide for you and your family.
Consider utilizing a living trust in addition to a will. A revocable living trust is a legal document that puts property and financial assets into a trust which are administered for an individual’s benefit during their lifetime. After death, the assets transferred to the trust are either immediately distributed or held in trust for a future distribution to named beneficiaries according to the trust documents.
A trust can also help you by avoiding probate. Property not designated for distribution in a will may be subjected to probate, which can be a lengthy and expensive process. Putting property in a revocable living trust to be distributed upon death can help avoid probate and unnecessary taxes and fees.
3. Talk to your family about your plans.
It is difficult for people to talk to their family about planning for death. Many people also find it morbid to talk about inheritance and property distribution after death. However, clear communication regarding your estate planning wishes can help avoid family disputes later on. Open communication may also help family members understand why you plan to distribute certain assets to certain individuals, and why some beneficiaries may have been left out.
4. Keep your estate plan up to date.
Tax and estate law changes all the time. Your estate plan should be regularly reviewed to make sure you are taking advantage of tax benefits while avoiding penalties and unnecessary tax liability. Changes in your life situation may also necessitate changes to your estate plan. Life changes like marriage, divorce, or the birth of a new child may make you reevaluate your estate plan to make sure it reflects your wishes and the needs of your loved ones.
5. Consult your estate planning attorneys.
With changes in estate planning law, new tax regulations, and court decisions, your estate planning attorneys are in the best position to make sure your estate plan is right for you. An experienced estate planning attorney understands what kinds of estate plans are likely to lead to a contested will or dispute. Consulting with your estate plan attorneys will help avoid family disputes, ensure your wishes are carried out, and reflect your estate planning interests.
If you have any questions about estate planning or making updates to your existing estate plan, the law firm of Butterfield Schechter LLP is here to help. We will answer all your questions and make sure your estate plan is set up to carry out your wishes and keep your family together. Contact our office today with any questions on how we can help you and your family succeed.