Almost everyone has, or know someone who has, a horror story about family disputes, arguments and fights over property after a loved one has died. If you don’t have one of your own ask some friends and you will definitely be surprised and shocked. It can be disputes over money, the family house, or even things that have no financial value but instead, sentimental value like Christmas decorations, furniture, collectibles, and so on. Sometimes these arguments are not even started by the family but rather by the significant others of the family. It doesn’t need to be that way. Families can work together to divide up a deceased loved ones property and remain close. Here are a few ideas to help avoid family fights over your property when you’re gone:
- Communication is key. Set your loved ones and family members down and have an open honest communication and let them know your wishes and the reasons for your wishes. You do not need to necessarily be specific about how much each person will receive but you can explain in general terms how are you dividing the property. You can also explain your rationale for giving certain things to certain people. This will avoid hurt feelings if your distribution is not exactly what everyone wants or expects, will give everyone a chance to voice their opinions, and will avoid surprises and disappointments.
- Write a letter to your loved ones. Not everyone is comfortable having a family meeting and risking confrontation, sibling rivalries, and disputes. Or perhaps it is too difficult to get everyone together for a family meeting. If you are not comfortable or capable of organizing a family meeting to discuss what happens after you’re gone, a thoughtful, detailed letter explaining your goals and wishes in your own words can be effective. This is especially important if you are leaving more to one child than another, leaving a personal collection to one child rather than another, or leaving a significant amount to charity or another organization versus to a family member. This type of letter, sometimes called a letter of intent, legacy letter, or an ethical will, is not legally binding but can provide insight into your goals and thoughts and give peace of mind to your family. Be sure to express your love and appreciation to them as well.
- Discuss with your family their thoughts on property distribution and establish a method. Settle on a method for personal property distribution. Families often find it helpful to talk through distribution of various items of personal property. While this may cause conflict, it is certainly better to discuss it while you are here and able to make your position known rather than remain silent and allowed for hostility. Often times people fail to fill out a personal property memorandum , leaving it up to the trustee or administrator to try to distribute the property into equal shares. This may involve hiring experts to value the property and try to make equal distributions however, with emotions running high, disputes can flareup as to sentimental value or financial value. By discussing these issues in advance and quote playing out” various scenarios such as a family auction with pretend money family members can be educated and possibly entertained as to the issues before they actually arise.
- Review your estate documents regularly. By reviewing your documents regularly you may find that you previously misunderstood the way in which your property was distributed or you may have forgotten how the property is to be distributed. By reviewing your documents regularly you can catch these oversights and get them corrected with your attorney. Your estate documents contain your wishes and you should understand them and they should reflect your choices.
- Pay close attention to how your assets are titled. Forgetting to title assets in the name of your trust or adding a child to a bank of count for “convenience” can cause a litany of horror stories. By not properly titling your assets or accounts, the entire plan or significant parts thereof could fail resulting in distributions completely contrary to your intent.
- Check beneficiary designations. Regularly review beneficiary designations on life insurance, retirement, 401(k) and other accounts to ensure they are consistent with your estate plan. Sometimes the named person will be the oldest child, second spouse or even no one as the primary beneficiary, assuming the estate plan will divide the assets according to your wishes. This is not the case and in most jurisdictions the name on the beneficiary designation form will take precedent over whatever the will or trust says. Beneficiary designations can have substantial legal and tax consequences as well. Failing to do so can lead to disastrous results.
- Spend quality time together as a family. Rather than saving every penny to leave to loved ones after you’re gone, spend some of that money to bring them together as a family while you are still here. Regularly funding family get-togethers at home or planning family vacations, cruises, tours etc. can strengthen relationships and create lasting positive memories for the entire family. This may also be an opportunity to gently discuss these issues with the family or members of the family. Good relationships result in less contention between family members.
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