What’s in your estate plan? At some point as you think ahead about the time after you’re gone, you’ll want to plan carefully how to allocate your assets and possessions to your loved ones. Like most people, you’ve probably envisioned a harmonious future scene in which your family and others closest to you are smiling with gratitude at your benevolence and generosity. But all too often, when the will is read and the estate parceled out, the result is anything but harmonious, as siblings, spouses, ex-spouses and others bicker over an estate plan they see as unfair. Are there ideas that will help you create an estate plan that minimizes the chances of an all-out family feud?
Your Estate Plan is a Gift to Your Heirs
We recently found this helpful article, written by nationally recognized writer Liz Weston, on the financial website NerdWallet. Weston writes, “Creating an estate plan is a gift to the people you leave behind. By expressing your wishes, you’re trying to guide your loved ones at a difficult, emotional time.” Sadly, though, things don’t always turn out as we hope. “All too often, well-meaning people do things destined to create discord, rancor and resentment among their heirs. What looks good on paper may play out disastrously in real life.” Misunderstanding, miscommunication, greed and emotion can all blend together into a toxic mess than can spell disaster for your family once you’re gone. That’s the bad news, Weston says. But there’s good news: by planning carefully, and discussing issues openly, you can help preserve the unity among those you love and at the same time ensure that your wishes will be honored.
Four Estate Planning Tips
According to Weston in NerdWallet, you can reduce the chances of family discord by doing these four things.
- Name the Right Executor. Having the right executor not only ensures that your estate will be handled well, it also helps build trust among family members. But what criteria matter most in selecting your executor? As Weston writes, “People often name executors based on family hierarchy (the oldest child, the only male) or personal relationships (the spouse, the best friend), rather than considering the skills needed for the job, estate planning attorneys say. The person tasked with settling an estate should be responsible, organized and scrupulously ethical.”
- Include Personal Property. Many people planning the disposition of their estate take care of the big things but overlook the small. “Some of the littlest things — a childhood toy, a holiday decoration, a piece of costume jewelry — can trigger the biggest family fights,” Weston writes. “Anything with sentimental or emotional attachments can stir up old rivalries and lead to lifelong rifts.” The simple solution: ask the kids what things they want and make a list. Keep it updated and store it with your will and other important documents. Have the discussion now to avoid a battle royal in the years to come.
- Don’t Delay Distribution Too Long. According to Weston, “estate provisions that tie money up for decades may be a mistake.” For example, a trust that allows your kids to inherit only after the surviving spouse dies could create huge problems if Dad has remarried to a much younger woman. “Another common estate provision is to dole the inheritance out over several years,” says Weston, “[because] some people use such provisions to drag the distribution out over decades or try to restrict what middle-aged children do with the money.” These terms can create resentment when heirs feel their parent is expressing distrust or the need to stay in control.
- Explain any Unequal Bequests in Advance. “Parents usually think they have good reasons for leaving one child more than others,” says Weston. “But unequal bequests often feel unfair to those left behind.” The advice from the NerdWallet article sounds right to us: schedule a family meeting and explain your thinking to the kids. It may be uncomfortable, Weston acknowledges, “but hearing the explanations directly from the parents can help keep the kids from blaming one another later.”
The Pieces Have to Fit Together
Sound legal planning is an important element of a good retirement plan – but don’t make the mistake of thinking that designating a POA and writing a will is all you need to do! Retirement planning that is truly effective combines these important legal considerations with a solid financial plan, a housing strategy, a medical safety net and a robust family communication plan. When all these are working seamlessly together, you have a LifePlan from AgingOptions. Let Rajiv Nagaich show you the power of this breakthrough in retirement planning. Join him at one of our free, highly popular LifePlanning Seminars, held in locations throughout the area. If you’re ready to become better informed and better prepared, click here for a calendar of upcoming seminars and register online.
Legal, finance, housing, medical and family – they can all work together when your retirement future is being guided by your own individual LifePlan. Age on!
(originally reported at www.nerdwallet.com)