A well-crafted estate plan can save your loved ones a considerable amount of money in estate taxes. It also lets you clearly designate how you want your assets distributed to benefit your family.
However, an estate plan (and sometimes the absence of one) can tear a family apart. Some spend a significant portion of an estate’s value in court battles that continue for years.
One Florida attorney says that even in seemingly “perfect” families, troubles brewing under the surface can erupt in the aftermath of a loved one’s death. She says, “Sometimes there are things we don’t express to each other. Sometimes among siblings, those resentments stay hidden until the parents pass.”
When family members are estranged or a parent has remarried, the chance of an estate battle increases. When there are stepsiblings and stepparents in the mix, the likelihood is greater for some family members to feel they were cheated. It’s not just multimillion-dollar estates that become battlefields. In fact, the attorney notes that “clients with fewer assets….[are] the ones who are most litigious and will spend most of the inheritance on lawyers.”
There are things you can do during the estate planning process to minimize the chances of hurt feelings, conflicts and legal battles among your family after you’re gone. For example, your choices of executor and other administrators like trustees and powers of attorney are crucial. Many parents choose the child they’re closest to or the one they consider the most capable of managing their estate. However, that can easily be viewed as an insult by that person’s siblings.
It may be best not to designate any family member and instead choose an independent trustee. Attorneys, accountants and banks can take on the responsibility. There’s a fee for their services, but it’s likely to be a lot less than the family would spend in litigation if they’re fighting a family executor.
It’s also wise to give your loved ones an idea of what’s in your estate plan while you’re still alive. While you might not enjoy explaining your decisions, if your loved ones understand that they are indeed your decisions, they’re less likely to go to court later.
Many people understandably don’t want to admit to their estate planning attorney that their family has some challenging dynamics. However, the more honest you are, the better able they’ll be to help you avoid disputes over your estate.