Find Us Online
Building wealth is only half the job. Protecting wealth for your loved ones and yourself is equally important. Through estate planning, business planning, and asset protection, our firm will help you protect everything you love — family, friends and favorite charities. For more information be sure to visit our web site where you will have access to our blog, events schedule and a complimentary newsletter subscription!
Family (Estate) Feuds
It is a sad truth: when a last surviving parent dies, the children often fight over the distribution of the family estate. Will your estate plan keep your children from feuding with each other after you are gone? Forbes estimates that $30 trillion will pass through inheritance during the next three decades, which could leave many families ripped apart by feuds. Adding to the problem, is the fact that many adults do not save enough for their retirement and expect to fund their retirement with their anticipated inheritance.
A legal challenge to your estate plan can delay the distribution of assets to the beneficiaries. The litigation can also drain the estate through court costs, experts and legal fees. The case can drag on for years, with the average costing $10,000 to $50,000, or even more.
Every family is different. The things that could trigger a knock-down-drag-out battle in one family, will not cause a blip on the radar screen for another. Here are some of the reasons why families fight over the estate when the last parent dies:
- Caretaker coercion. When one sibling takes care of an aging parent and then receives the house or a disproportionate share of the inheritance, the other siblings might cry foul and accuse the caretaker sibling of undue influence and coercion. While an adult who has the legal capacity to make a will or trust generally has the right to dispose of her estate as she sees fit, this situation can lead to contests when the other children are not informed regarding why the inheritance is not equal.
- Disinheritance. When a person disinherits a natural heir, that heir has nothing to lose by challenging the estate plan. Some people include language in their will or trust that penalizes would-be beneficiaries for contesting the will or trust.
- Sibling rivalry. Sometimes, siblings who never got along well try to settle old scores by squabbling over the deceased parent’s estate. The solution to this scenario will depend on the facts of the situation.
- Advancements or Gifts. If the parent helped a struggling adult child with student loans, a house down-payment, or other big-ticket items while the parent was alive, that child’s siblings might feel cheated. Make it clear in the estate plan whether this assistance was an “advancement” on the future inheritance or a gift. The former is “repaid” out of the inheritance and the latter is not.
- Unequal financial status of heirs. Sometimes a parent leaves an asset, like a vacation home, to all the children equally. A wealthy beneficiary can afford to hold the asset, until the time is right to sell it. However, less wealthy co-beneficiaries might want to sell the asset right away. The disparity in financial security can lead to disagreements among the siblings.
- Co-trustees or administrators. A parent might try to play fair among adult children, by making them co-trustees of the trust or co-administrators of the estate. Unfortunately, even this strategy can backfire, if the siblings do not work well together.
One of the best ways to avoid future problems among your heirs is not to keep secrets. Tell your natural beneficiaries about your plans and your reasons for them. You do not need to go into detail and include dollar amounts, but a general idea of what assets are in the estate and who will get them, can prevent unpleasant surprises.
Finally, planning with a “funded” living trust — one which owns your assets during your lifetime — removes a lot of the stress of settling your affairs after your death. An experienced estate attorney can draft it to reduce infighting and lessen the chance of a will contest later on. This can be a final gift to your loved ones.
Copyright © Integrity Marketing Solutions. All Rights Reserved.