Conflicts between family members actually lead the list of threats to inheritances. Wealthy families and business owners are advised to plan proactively to prevent estate battles.
If there’s a generous inheritance in your future, be aware that the relatives you love or loathe are the most likely reason that inheritance might be challenged, says a recent article from CNBC, “Say hello to the No. 1 threat to your $11 million inheritance.”
A TD Wealth survey found that 44% of attorneys, trust officers and accountants cited family conflicts as the biggest threat to estate planning. The company surveyed 109 estate planning professionals in January at the 52nd Annual Heckerling Institute on Estate Planning in Orlando, Florida.
Modern families create more estate planning complications, for a number of reasons: there are more blended families, multiple ex-spouses, children from prior marriages and situations where one spouse is significantly younger than the other are not uncommon in today's day and age.
There are several ideas you should consider to maintain the peace between family members, while making certain your loved ones receive what you intended. The only way to make sure your assets are divided the way you want, is through a property drafted estate plan (don’t forget to make sure that the beneficiary designations on accounts are correct and properly aligned with the overall plan!) Those who die intestate (without a will) leave everything up to a probate judge in their home state.
Business owners also need planning. It’s common for a married couple to operate a family business that comprises most of their wealth. In many cases, one of their adult children is actively involved in that business, but their other children are not. In this circumstance, business owners need to plan ahead in order to figure out how they can make their two less-involved children whole.
If you have not already done so, review your estate plan with your attorney. You should review your plan if there have been any significant life events, like a birth, marriage, death or divorce. Finally, have some extended conversations with your heirs, explaining what your estate plan entails and why is essential in mitigating family conflicts. An ongoing discussion, while you are still alive and well, can prevent surprises when you pass away.
Reference: CNBC (April 11, 2018) “Say hello to the No. 1 threat to your $11 million inheritance”