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How to Communicate Your Estate Planning Choices to Family and Heirs

Dec 16, 2020

Paul S. Labiner

Paul Labiner

Managing
Partner

Estate planning isn’t just about securing your assets. A critical knock-on effect of a comprehensive estate plan is its ability to forestall intra-family confusion, conflict, and stress about how you wanted your estate to be handled.

But even if you think your estate plan is tidy and self-explanatory, it may still be confusing to your family and leave them with unresolved questions.

Believe it or not, contests, disputes, and even lawsuits over estates and inheritances are real problems in estates of all sizes. According to a 2018 survey by EstateExec.com, family conflict had plagued over 44% of respondents during the estate settlement process. One memorable response noted that after their mother’s death,

“One brother sued the rest of us and my sister the executrix constantly, and eventually burned up the money in the estate on lawyers we needed to defend us.” (Emphasis mine)

Lawyers and litigation are expensive, and, in this case, the squabbling and infighting drained the whole of the estate.

If you have taken the time and energy to prepare for a smooth distribution of your property and assets, why not also make sure your family and heirs don’t come to fisticuffs in the process?

What Causes Estate Disputes?

The survey above—and my own professional experience—shows that the causes of conflict vary widely.

Sometimes, heirs believe that another party has stolen from the estate or claimed property or assets they weren’t entitled to. Other times, children and family members simply criticize the provisions in the will. And occasionally heirs insist that the personal representative or executor has mismanaged the estate.

A big cause of all of these types of conflict is a lack of communication, which often leads to mistrust, anger, and resentment.

How to Avoid Estate Litigation and Conflict

The first and most critical step to avoiding a costly legal dispute over your estate is to create a comprehensive estate plan that describes how, when, and to whom you want your property and assets to transfer.

After you’ve built that plan, you should consider discussing the choices you’ve made with your heirs and beneficiaries. You don’t have to tell them the full value of each asset, but an overview of your plans might make sense. You don’t want them to be blindsided by provisions in your will when you pass.

Here are some specific instances in which a family discussion about the future of your estate might be warranted:

  • Conditional Inheritance: If you are using Asset Protection Trusts or trusts with age or timing restrictions, your children may not have immediate, unfettered access to your assets. An explanation as to why you implemented the plan as you did might make sense because your heirs may not understand the value and benefits of Trust Planning.
  • Unequal Distributions: If the asset distributions between your children will not be equal, for whatever reason, this may warrant a discussion too. Disparities in inheritance can easily create anger and confusion among heirs.
  • Powers of Attorney: We recommend that everyone assign financial and medical Power of Attorney to a trusted person. These individuals will be able to make financial decisions and medical decisions on your behalf if you are no longer able to do so. It is probably best to inform the individuals to whom you’ve assigned these Powers of Attorney of their roles.
  • Delayed Inheritance: Some Trust planning mechanisms require the transfer of assets to surviving spouses. If you’ve implemented this sort of plan, you may need to explain to your children that the ultimate distribution of assets to them will be delayed until the death of both yourself and your spouse.
  • Disinheritance: Deciding to leave a child or other heir out of your will can be a sensitive issue. But not explaining that you have made this decision and why could cause unnecessary complications between the disinherited party and your other heirs. Informing impacted parties in such a case might be a good course of action.

Take the First Step to a Cohesive Plan

None of the issues (or their solutions) we’ve raised here can happen at all if you haven’t implemented a comprehensive estate plan to direct the distribution of your assets.

We urge you to take the necessary steps to protect yourself, your family, and your hard-earned assets and wealth. Whether you need to develop your first estate plan or update your existing plan, we can help take the fear and frustration out of the estate planning process.

Call us today at (561)998-2362 or fill out the confidential form below to schedule your free Financial Legacy Review now. We’ll talk about your planning needs, as well as many other facets of your overall financial and family plan.

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