Estate Planning: 5 Steps To Avoid Inheritance Disputes
Planning a strategy to deal with your assets after you die isn’t something most people want to think about. Even though we know how important it is, it can be very difficult to find the energy for estate planning. Unfortunately, if it is neglected or done poorly, it can result in family disputes.
That’s why it’s so important to invest quality time into carefully curating and fine-tuning your estate plan.
Read on for 5 planning tips to avoid family disputes.
1. Hire an estate planning lawyer
With an increasing amount of online estate planning guides, it can be tempting to opt for the ‘cheaper’ and ‘easier’ DIY options. However, never underestimate the value of a lawyer.
DIY estate plans are commonly challenged in court due to being too vague. By hiring a professional, you are minimising ambiguity by having expertise on your side as well as ensuring you have completed the correct legal documents.
2. Distribute as fair (and equal) as possible
An equal distribution is easier said than done but do your best to ensure it remains fair and appropriate. In many cases, some children provide more care for their parents as they age than others. Some family members may require greater help or have different needs, and others may have drifted away. There are various reasons why you may feel the need for an uneven distribution, however, this can lead to conflict later. Be sure to focus on a fair distribution, and let your loved ones know why you believe it’s appropriate.
3. Choose the right trustee or executor
Considering nominating a child or close friend to act as your Executor? It’s fairly common, however this can come with some downfalls worth bearing in mind.
When you appoint a loved one to oversee the trust administration, you are opening up a potential window for conflict or disagreement later down the track. We never know how loved ones will handle grief, so be sure to ask yourself, do you really think this person can carry such a large responsibility during this emotional time? Could they be driven by their emotions rather than your wishes? Also, are they capable of dealing with the complexities of the process?
There are other options when it comes to appointing an executor to administer your estate. An estate planning lawyer can assist you to make an assessment of the most appropriate person to appoint.
4. Communication is key
As mentioned earlier, if you’re distributing an uneven amount between family members, yet have a valid reason for doing so, be sure to communicate your reasons. Make sure your loved ones know and understand why you’re leaving certain assets to specific people. Successful communication is a two-way street, so be open to feedback or suggestions, and answer any questions your loved ones may have.
5. Continually monitor and update your plan
It is very important to review your estate plan regularly. We recommend at least turning your mind to whether your will and enduring power of attorney is still relevant each year. It’s important to think about those who are named in any documents and whether their circumstances have also changed.
If you organised your estate planning at the age of 50, yet pass away at the age of 90, the chances of your wishes having changed over the past 40 years are highly likely.
An updated estate plan will help minimise family disputes when it comes the time to be put into place.
Take control over the future of your assets now!
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