Even if you are happy with the choices you have made, there is no guarantee that your siblings, spouse, or children will agree with you. Many family estates are tied up in legal battles for years because beneficiaries feel they have been cheated or wronged, or do not understand the choices you have made.
While not every dispute about property can be avoided, a few simple precautions can greatly reduce the majority of arguments among your beneficiaries. When creating or modifying your will, you should always remember to:
- Make your plans known. The best way to avoid a fight about what happens to your estate is to inform your family members of your wishes during your lifetime. Some people feel bad about disinheriting a family member or leaving one child fewer assets than another, and choose to wait until the will is read to avoid discomfort. Unfortunately, being surprised with bad news at the reading of a will is more likely to create a dispute than telling beneficiaries what to expect ahead of time. They may not respect your decision, but they will have years to acclimate to the idea (and to refrain from making plans based on money that isn’t coming to them).
- Choose your executor and trustee carefully. The person who acts as executor for your estate or fiduciary for your trust will have a great deal of control over your assets, so it should be someone you have faith in to handle the duties associated with the role. If the person you choose is also a beneficiary, you should make it clear that he or she is obligated to carry out your wishes rather than his or her own. An executor and trustee must have some grasp of financial concepts, have good organizational skills, and keep the rest of the beneficiaries informed.
- Require transparency. Require the executor and trustee to provide information to the beneficiaries. This deters the executor and trustee from acting unfaithfully, makes it easier for a beneficiary to hold an unfaithful executor or trustee accountable, and it provides the beneficiary with peace of mind to see that the executor and trustee is acting faithfully.
- Update your estate plans regularly. Life changes daily, and your wishes for your estate today may be vastly different than what you had chosen five years ago. You should examine your will, trust, and beneficiary designations every few years, and update your documents whenever a major life event occurs (such as divorce, remarriage, birth of a new child, or the death of a trustee or beneficiary). If you fail to update your documents, your beneficiaries are more likely to challenge your decisions after your death.
- Address sentimental items. Many disputes arise not over valuable items, but smaller items that carry sentimental value. Including a line in your will stating that your personal belongings or furnishings are to be distributed evenly among your beneficiaries is not enough to settle who is entitled to what. The easiest way to avoid this is to ask your immediate relatives to write down which items they would like to have after your death, and include these in your will by name. Make it clear that if they do not complete the task, they run the risk of losing claim to the item.