Planning Your Estate Now
Last Will and Testament
One of the most important steps you can take in preventing inheritance disputes between your children is estate planning. Planning your estate before passing away gives you the power to determine which child receives what property.
Having a Last Will and Testament permits you to allocate money, property, business interests, items of sentimental value, and much more upon your death. Your Last Will and Testament can specify which of your children gets what property, or if you’d prefer certain property (such as your home) to be sold, with the proceeds being split between children, you may specify as much.
Another valuable tool in planning arsenal your estate are trusts. A trust is a fiduciary agreement that consists of three parties: a settlor, a trustee, and a beneficiary.
You, the settlor, give the trustee the right to hold the title to either property or assets, for the benefit of the beneficiaries (your children, or even in some cases, yourself). A trust provides legal protection for your assets and makes sure that they are distributed according to your wishes after your passing. Trusts also save time in the distribution process and involve less paperwork than some other options. For instance, having a valid trust in place can eliminate the need for your estate to go through the probate process after you have passed away.
A living trust is one that is created while you, the settlor, are still alive. The purpose is still to transfer your assets or property to the care of a trustee after your death. More specifically, a revocable trust is a type of living trust that would allow you to alter the terms of the trust at any time after creating it up until you pass away. The property remains in your control for the duration of your life. Upon death, the person you appoint as trustee will see that the assets are distributed to your children in the manner directed by you.
Another type of trust which is available to choose from is the irrevocable trust. Unlike a revocable trust, the irrevocable trust is, as its name may imply, irrevocable upon your death, meaning that it cannot be altered. Therefore, unlike revocable trusts, however, once established, you will not be able to alter the terms of the trust.
A benefit to the irrevocable trust is that it has the ability to reduce or eliminate estate taxes, as the assets are no longer in your name after the establishment of the trust, and they sit in the trust until the time you have designated for them to be passed on to your children.
Disinheriting A Child
While disinheriting one or more of your adult children is legally permissible, it is important that you specifically state in your Last Will and Testament or trust that it is your intention to do so. The mere exclusion of the name of the child you wish to disinherit is not enough to express your intention to disinherit, and thus will not completely prevent that child from receiving a part of your estate.
Often, if you do not express your intent, it is a possibility that a court will view the omission of a child as an error on your part and award that child an equal part of your estate. As such, it is important to state clearly that the omission is not an oversight on your part and that it is your direct wish to exclude that adult child from your will. An estate planning attorney can best guide you in drafting the most appropriate language to best suit this goal.
Appoint a Third-Party Executor or Trustee
Another helpful way to prevent siblings from fighting over their inheritance is to appoint an objective third party to act as the executor or trustee instead of a family member. Though, it is common to nominate one of your children.
By appointing a person with no legal or personal interest in your estate to serve as the executor or trustee, you can avoid familial conflicts before they even begin. Appointing a child as the trustee/executor is a fairly common practice, however, it can lead to an imbalance of power and cause issues amongst your children during the distribution of assets.
Communicate With Your Children
Often times, the biggest point of contention between children isn’t property, but items that hold sentimental meaning to certain family members. Including your children in the estate planning process can help you to allocate certain pieces of property to the child that most desires them. Additionally, having open and clear communication about your intentions for your estate will prevent any nasty surprises from occurring after your passing, which in turn, will reduce fighting. It’s important to remember that your death has the opportunity to bring stress amongst your loved ones and alleviating that stress as early as possible is certainly something to be considered.
If you would like more information regarding which estate planning options are the right ones for you and your family, or for a consultation regarding the creation of a Last Will and Testament or trust, please contact Stivers Law. We are happy to help you figure out the best options for your estate planning needs.
As a reminder, the information provided on this blog article is only to be used for general informational purposes and not intended to be used as legal advice.