How to Minimize Family Inheritance Disputes

Too often clients call our office displeased with the distribution of a parent's estate.  Unfortunately, at this point, obtaining clarity from the testator is not an option. Minimize Family Inheritance Disputes Minimize Family Inheritance Disputes

While it is ultimately a person's own decision as to how to distribute his or her estate, a little clarity and communication can go a long way.  While there is no guarantee all disputes can be avoided, following are steps that can be taken to minimize family disputes.

According to author Jean Chatzky, in an article titled How to Leave an Inheritance to Your Kids on AARP.com, there are 5 simple steps to help prevent family bickering and bitter disputes related to the division of your estate assets.

While these steps are not foolproof, knowing the considerations can minimize problems for your family later.  The 5 steps are summarized below:

  • 1. Manage Expectations With Open Communication.  Secrets only lead to uncertainty and suspicion.  Being open and honest with your children about their potential inheritance may help prevent hurt feelings or disputes among your children.  This does not mean revealing all of your assets to your children, but provide them with enough information to have an idea of what to expect when you pass away.
  • 2. Level the Playing Field.  One of the most recommended ways to prevent inheritance disputes is to make equal distributions to your children.  However, if there is a disparity between the amounts being distributed to your beneficiaries, it may be a good idea to explain the reasoning and rationale behind your decision.
  • 3. Do the Distributing Yourself.  If you want the distributions to your children to be equal, name them as equal beneficiaries.  However, if you have personal property like art or jewelry to bequeath, leave a written note of instructions for dividing and distributing those articles.
  • 4. If you Distribute Unequally, Explain Yourself.  Perhaps you do not like talking to your children about your financial decisions, you are not alone.  The simple act of leaving a note to explain your decisions may alleviate any resentment between your children.  Just explain in the note you love all your children and the reasons for your distribution decisions.
  • 5. Use a Trust to Eliminate Uncertainty.  In an effort to promote responsible financial decisions-making, you can use a trust to distribute your estate assets to your beneficiaries.  A properly written trust can be structured to make partial distributions to your beneficiaries when each attains a certain age, for instance at ages 25, 30, and 35.
  • Tip 6:  Execute Documents / Implement Plan
  • Tip 7:  Track/Monitor Plan

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Estate Planning Requires Clarity

The biggest take-away from this article, is the importance of clearly communicating your estate planning intentions either to your family and beneficiaries, or in your estate planning documents.

If you would like to learn more about your options when leaving an inheritance to your children call (440) 530-3605 to speak with an experienced estate planning attorney at The DiCello Law Firm.

REFERENCE: AARP - Estate Planning, Jean Chatzky (April 2013) "How to Leave an Inheritance to Your Kids" 

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