Inheriting property does not always bring out the best in family members. Many people, of course, handle everything smoothly, following a loved one’s instructions as much as they can and peacefully agreeing on the rest. But a death can raise long-dormant relationships issues and revive old jealousies and resentments.
Probably the one element most likely to provoke bad feelings is surprise. If everyone in the family knows the broad outlines of how you’re planning to leave your property, they may understand your choices. Even if they don’t, they will have had some time to get used to the idea and air their concerns. They are likely to respect your choices, and not try to undermine them informally or through a lawsuit.
If, on the other hand, your estate plan takes everyone by surprise, there could be confusion, argument, and possibly court fights. Say, for example, an elderly man leaves the lion’s share of his estate to a charity or to a caregiver who recently arrived on the scene, or a woman leaves a valuable piece of art not to her children but favors a niece who wasn’t known to be particularly close to her. If the children knew that the niece had a special connection to the artwork, or that the caregiver had performed extraordinary services, they wouldn’t be left to wonder at the fairness of the bequests.
Even more common is the hurt caused by an unequal division of assets among offspring. Most parents leave their property to their children more or less equally, but there can be many good reasons for a different plan–perhaps one child has problems handling money, or already received an “advance” on his inheritance in the form of a gift. As long as the children all understand the reasoning, they are likely to accept your decisions. After all, it’s your money.
We’ve all heard the horror stories of families torn apart by arguments over inheritances. Siblings fighting with each other over parents’ belongings, children fighting with a stepparent over the family home or bank accounts… it’s ugly.
You may assume that your family will behave well—and you may be right. Most families don’t have serious disputes over inherited money, and very few end up battling in court. But a death in the family doesn’t always bring out the best in people. You can encourage family harmony by taking some simple steps now.
Some parents think that their oldest child should be the executor, even if he or she doesn’t seem very well suited to the task. But you’ll do better to discard any preconceptions about who should be the executor, and instead pick someone who is honest, organized, hardworking, and a good communicator. Inheritors are less likely to become anxious or suspicious if the executor keeps them up to date on what’s happening.
Think about people who are unpleasantly surprised after a loved one’s death: the daughter who doesn’t inherit the family china, the son who gets a smaller share than his siblings, the favorite niece who isn’t even mentioned in the will. Their disappointment doesn’t mean they’re greedy; they’re probably just mostly hurt, confused, and frustrated by the fact that they will never know why they didn’t get what they expected. But hurt feelings can lead to suspicion and anger.
You can avoid all that by making your decisions—as many of them as you wish, anyway—known while you’re alive. You can explain, for example, that the family china is going to your brother’s daughter because her side of the family doesn’t have anything else from your mother; that your son is getting less because you paid for his graduate school education; and that you would like your niece to choose a memento but don’t plan to formalize it in your will. These simple explanations will go a long way toward avoiding bad feelings. Keep in mind that your family members don’t have to agree with you—after all, these are your decisions to make, and they don’t get to vote. But if everyone knows that you made your decisions thoughtfully, not in anger or by mistake, then the arguments will probably go away.
If you consult an attorney for estate planning advice or to draft documents, keep your relationship independent of influence from others. Choose someone who comes recommended by friends or others whose views you respect, not someone who has done work for anyone you plan to leave money to.
Make sure you talk to the attorney alone. If one of your relatives or friends helps you out by driving you to the lawyer’s office, that’s great, but your discussions with the lawyer should be private. You need to feel free to express your wishes, whatever they are and whomever they might displease—and your lawyer needs to know that you are expressing your honest wishes, not altering them because someone else is listening.
It’s common advice to update your will, trust, and beneficiary designations every few years or whenever you have a major life change, such as marriage, a new child, divorce, or the death of a major beneficiary. This is good advice, because if you don’t change your documents now and then, they probably won’t reflect your current wishes. There’s another benefit as well: Your continuing involvement can head off suspicions that you didn’t take an active role in your estate planning and were so influenced by someone else that your decisions weren’t really your own.
For example, if you regularly meet privately with your lawyer, banker, or accountant to discuss your estate planning, they could say, if asked, that you were on top of your financial matters and reacted appropriately to changed circumstances. Documents produced in that setting are probably going to be tough to challenge. In contrast, it would be much easier to contest the will of an elderly person who hadn’t made a will in 25 years and was taken to an unfamiliar lawyer’s office by a relative—who turned out to be the main beneficiary.
Many people add a son or daughter to their checking account as a co-owner, just so the new account signer can write checks and help out with managing money. But in most cases, adding someone to the account makes that person a full co-owner, with the right to keep the money after the original account holder’s death. It’s an argument waiting to happen: All the children expect to share the money in the account, but the one who is the co-signer on the account legally inherits it all.
There are better alternatives. You can give someone you trust “power of attorney,” giving that person access to the account, or create (in some states) a “convenience account,” which also authorizes the person you choose to write checks for you. Either way, the person has a legal duty to act only in your best interests—and won’t automatically inherit the money in the account after your death.
Many wills contain a clause that leaves personal belongings and household furnishings to several beneficiaries “in equal shares,” but without any instructions on how that’s to be accomplished. Who divvies up the items? Who decides what constitutes “equal” shares when you’re allotting personal items that are all but impossible to put a dollar value on?
Do your beneficiaries a favor and provide some guidance. You might name specific items in your will, give the job of dividing personal effect to the executor, or instruct your offspring on how to conduct an auction for items they just can’t agree on.