Creating an estate plan is a valuable way to prevent unnecessary legal conflicts and delays. However, even with a plan serving as a guide, distributing your property after you pass away can trigger fights and resentments among your loved ones.
Taking certain precautions can help minimize these potential issues and make asset distribution easier for your family.
Don’t confuse equal and fair
Dividing your property and financial assets equally among your children could seem like the most straightforward way to distribute your estate. While this could work in some cases, equal is not always fair.
For instance, if your estate is worth $300,000, giving each child $100,000 could make sense.
However, fights and resentments could arise if one of your children is already very affluent while another is struggling. Perhaps one of your children served as your care provider while another has been estranged for years. In these scenarios, leaving the same amount to every child can be unfair.
Before you opt for “equal” over “fair,” you may wish to consider individual elements like each child’s circumstances. Another example would be: One child inherits a house valued at a Fair Market Value (FMV) of $450,000 (free and clear); and another child a house valued at $500,000 (with a $350,00 mortgage). This division is equal as to each child getting a house, but not equal as to the value. Again, is that fair?
You have the right to make any decisions you see fit in your estate plan. After all, it is about your legacy.
That said, your decisions can be confusing, and others can misconstrue your intentions. And without you there to explain things, your family has little more than an estate plan to go on. Because of this, you might consider providing context for your loved ones.
Including statements that explain your decisions can help answer questions that would otherwise go unanswered.
Avoid painful surprises
You may have seen shows or movies where a will reading turns theatrical because of surprises left in the legal paperwork.
However, revealing shocking information in estate planning documents can potentially cause tremendous pain for your loved ones. Even if the surprise is ultimately good, people may not appreciate learning about something after you are gone.
Thus, leaving these dramatic revelations for daytime TV plots can be wise.
Talk to your family
If one of your priorities is to prevent infighting and conflicts among those you love, talking to them ahead of time can be crucial. Having an honest conversation about your wishes gives you a chance to get feedback, address concerns and make adjustments to your estate plan before it is too late.