Inheritances often cause drama within families. According to a survey of 2,700 people conducted by Ameriprise Financial, as many as 25% of respondents said that an inheritance caused stress within the family. Sometimes, it’s a slight bump in relationships, but other times it can result in a fractured family.
Newsday’s recent article, “Report: Inheritance causes tension in 25% of families,” shares some ideas on how to keep the peace.
Memorialize your wishes in writing! This is absolutely the most important strategy for avoiding a family feud at the death of yourself or a loved one.
You need to make sure that you have the proper estate planning documents in place, drafted by an experienced estate planning attorney. The most important of these is a will, which documents your wishes and intentions concerning your assets. It also appoints fiduciaries with instructions to carry out your wishes.
In addition, consider these other notions:
- Avoid family rivalries. Don’t leave your lake home to be divided between two siblings who don’t get along. Instead, direct that the cabin be sold. You can also just bequeath it to the one who enjoyed it the most and make things equal in the estate with other assets.
- Play hard ball. Add a no-contest provision in your documents, so if anyone contests your estate plan, they will lose their inheritance.
- Use insurance as a tool. An insurance policy with a designated beneficiary is a smart way to make a gift to someone and won’t be challenged easily.
Frank conversations on a regular basis can help manage expectations, so that everyone knows, before you pass away, what they will be inheriting, from financial assets to a family artifact. Having a conversation with family members before you pass away, may not alleviate all of the tensions, but it will help prevent any surprises or major disappointments.
These are not easy conversations to have, but consider what could happen without any discussions. It may be helpful to bring your adult children to meet with your estate planning attorney, so that they understand the process better. This also gives your estate planning attorney useful insight into the family’s dynamics.
Reference: Newsday (April 2, 2017) “Report: Inheritance causes tension in 25% of families”