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Compassionate. Convenient. Comprehensive.

Compassionate. Convenient. Comprehensive.

Family Conflict One of the Biggest Challenges to Estate Planning

| Sep 21, 2018 | Estate Planning |

Aside from having no estate planning in place at all, family conflict is the greatest challenge facing families regarding estate planning.

Families today are more complicated, and conflict between family members is the greatest threat to receiving assets or inheritance. The landscape of a “typical” American family has drastically changed over the last few decades. According to a 2018 article from CNBC, there are more blended families, ex-spouses, large age differences between spouses, and children from prior marriages or relationships, and all are being factored into estate plans – or not. These situations are more common in 2018 than in 1958, for instance, and may lead to litigation as relatives fight each other for an inheritance.

The first step to heading off this kind of conflict is to have plans on paper. Plan ahead and set down in legal documents what you want to have happen to your estate after you pass. This could mean a trust, a will, powers of attorney, mental health and medical documents, and more. By formally having your plan documented and filed, you make it easier for your agent(s) to manage and properly divide your assets according to your wishes after your passing. You can also use this as an opportunity to think through who would inherit specific items, if you would like to donate any portion of your estate, who should act on your behalf, and if you own a business, who would manage the business assets. Planning and legally documenting your wishes can go a long way to heading off conflict as your expectations will be clearer. Should you leave no plans or estate documents, your estate goes into probate and a court will decide the division of assets, which may not be divided how you would wish.

The second step is clear communication. If you can let all interested parties know what your plans are for your assets after you’ve passed, and answer their questions or concerns, you may be able to ease any tensions or prevent major conflict before it starts. However, keep in mind that you need to make the best decisions possible for your assets and loved ones, and that may mean that not everyone will be happy. Conflict may be inevitable depending on your situation, and particularly if one child or other relative is being intentionally written out of receiving any inheritance. But you may be able to mitigate the issues by clearly communicating your plans as well as your expectations. One solution that is growing in popularity is to write a non-contest clause into your estate plans. This typically says that if any beneficiaries contest the will in court, i.e., fight with their siblings or relatives to receive a different share than what you wrote, then by contesting the will, they relinquish their share.

Finally, keep your documents updated! This third step is possibly the most crucial. Having the documents isn’t enough. If your estate plans are twenty years old but in that time you’ve remarried, had a falling out with relatives, changed your mind about medical decisions, or decided to bypass older children in favor of grandchildren, then your plans will not accurately reflect your changed wishes. Without an updated document, your executor and agents will have to refer to the previous legal documentation. This could cause conflict if you had verbally expressed a change to your wishes to family members but had not updated your trust or will to reflect the change. If happens more often than you might think that someone remarries but forgets to update their will to benefit their new spouse and the ex-spouse is still named as the legal beneficiary. Often the court will rule in favor of the last filed legal documentation rather than try to second-guess what your wishes might have been. So the lesson here is review and update your documents every five years or when there is a major life event such as a birth, death, marriage, divorce, etc.