Every parent dreams of passing on a significant legacy to their children. However, their wishes often don’t materialize due to poor estate planning. Misconstrued details can leave a family in disarray, resulting in conflicts among the family. It’s important to plan properly and anticipate any conflicts that your estate plan could cause between your spouse and children.
Here are some steps you can take to reduce inheritance conflict and manage bad-blood between your heirs.
Create an Estate Plan
If you have not yet done so, now is the time to create a detailed estate plan. A well thought out plan can ensure that you provide the proper support and financial stability for your surviving heirs and make sure that your wishes are carried out exactly how you intended. Without an estate plan you can’t choose who your beneficiaries will be, who will administer your estate, or choose a guardian for your children – the courts will decide for you.
Hold a Family Meeting
You’ll be surprised to learn that many children don’t want to inherit their parent’s belongings. Some prefer just to receive cash, while others may want their inheritance to go to another. You won’t know your children’s preferences unless you ask them. Hold an open family meeting so everyone can talk and express their interests. This can help avoid conflict in the future.
Address Personal Property
Most bad blood between heirs is usually in relation to personal property and how it is distributed among family members. To avoid a family argument over your belongings when you’re gone, leave a list with detailed instructions. Outline who should inherit what item and add it to your estate plan.
Summarize Gifts and Loans
You may have loaned money to one of your children to buy a home, start a business, or avoid bankruptcy. But if you don’t adjust for this in your will, your other children may become jealous. To avoid any conflicts, always address and outline any loans or gifts in your estate plan.
Organize a Third-Party Trustee
Except in extreme circumstances, your spouse should be named the sole and primary beneficiary. In second marriages, however, it may be beneficial to appoint a third-party trustee to mediate any interests as stepparents and stepchildren may not agree on the terms. A parent who distributes all the money to the children may endanger the well-being of their surviving spouse. However, if they pass on the full inheritance to the stepparent, then they may be creating more bad-blood – especially if the stepparent distributes the money to their other children.
Update Your Plan Regularly
When there are any significant changes to your financial situation or major life changes like divorce, you should update your estate plan. A current and revised plan will help to avoid any unwanted results like passing on your assets to your ex-spouse instead of your new one.
Managing bad blood between your heirs can often be prevented with a good, updated estate plan. Make sure you get in contact with us at The Beacon Group of Assante Financial Management Ltd. about how you can get started and create a comprehensive plan that outlines your wishes.
