While children have no legal right to your inheritance, the unfortunate truth is that the descendants of many wealthy families feel obligated to wealth. So, while many parents assume that their children will handle things amicably, the inverse is often true. This is why we have put together this primer to help you avoid family disputes over your estate.
Inform Your Family of Your Estate Plan
Get things out in the open instead of leaving them to fester. Gather your family and tell them all about your estate plan. Start off strong and with a healthy communication network to air out any disagreements in the open.
Refrain from Putting Property in Joint Names
Your children are family first and foremost. Unfortunately, dragging finances into family relationships has a way of altering them for the worse. Do not make it such that one of your children is dependent on the goodwill of the other for funds. You cannot assume that your children will take care of their siblings just because of their family bond. Refrain from putting property in joint names with a single child and expecting that child will share with their siblings. You should also avoid giving the share of one child to the other to “protect” it from creditors or a spouse. Once lawyers have to get involved to untangle a financial dispute, things have often changed irrevocably.
Equal Treatment is Not Always Fair
Equal treatment may not always be the fairest route. What happens when one son has given all of his time and effort to the family business, only to be passed the same share as their sibling who has not put in any work? What about the child who has not paid back the loan for a house you gave them years ago? Should a son who has been traveling the world and living the decadent life at your expense be entitled to the same share as a daughter who has been by your side and taking care of you in your twilight years for the past decade? These are all things to consider when you are trying to find out how to divide your inheritance.
Getting Personal
It is not all about the money, either. Some of the most bitter disputes are not about finances, but about who gets to take care of personal items. Things like pianos, or heirloom pieces of jewelry, may inspire the biggest fights – and it is not about what these things are worth. Rather, it is about their emotional value. Remember that in a family, everything is personal. To avoid fights over personal items, get to know the children and find out what they value. When it comes to passing down your mother’s prized ring, your daughter who always had a close relationship with her grandmother might treasure it more than another daughter who was born too late to know that grandmother at all. Estate planning is often fraught, and you want to make sure you handle it right. You should also learn how to protect your assets so that you have something to leave your descendants in the first place.
