Battles over estates can intensify underlying issues between siblings and ultimately tear families apart. However, there are ways to lessen the chances of infighting among your heirs before you pass on. Advance planning can drastically help minimize conflicts among your children, spouse, and other heirs.
Not Just About the Money
According to a prominent wealth management group, around $30 trillion of wealth will be passed to the younger generations over the next thirty to forty years. Roughly 70% of those families will lose a chunk of their inheritance, mostly due to estate battles.
Battles among heirs are not always about the money. Estate planning attorneys almost always have a story about a wealthy estate where the children are fighting over a simple piece of jewelry or other item in the house. It isn’t uncommon for fighting families to spend more on paying for legal fees battling the other heirs than they actually stand to inherit.
What is Fair May Not be Equal
One of the most common issues among people creating their estate plans is that they assume that equal means fair. However, when it comes to property and other possessions that are not cash, it is almost impossible to apportion an estate equally.
A good place to start is to determine what means “fair” within the context of your family. If there is one child better off and one child struggling financially it may make more sense to leave one more than the other. If there is a child with special needs, that child may benefit more from money than a piece of real estate. On the other hand, you may not think it is fair to leave a significant amount to an estranged child or someone that you have given a chunk of your estate to during your life.
Preventing Heir Battles
Communicating your final wishes regarding your assets, possessions, and estate is vital in deterring family feuds after you are gone. Expressing your wishes explicitly in a will is the most common way to prevent fighting. Many people also create an addendum to their will or trust explaining why they divided their estate in the way that they did. The less ambiguity that you have in your estate means the less chance that there is for heirs to misconstrue your wishes.
Some people find it easier to make a list of all of the beneficiary accounts, bank accounts, and big ticket items in the estate as well as a corresponding list of who will inherit what. Having the visual lists can make it easier to see who is getting what in their inheritance.
One of the easiest ways to avoid fighting heirs is to speak with them and ask for their input in your estate plan. You never know what your heirs might really want or what they have no desire to hold on to once you are gone. The key to family discussion is equality. If one heir gets a say in what they inherit then they all should, and you should explain your reasons for disproportionate division of assets, as well.