Nine Ways To Avoid Estate Disputes
Many times you hear about some wealthy Hollywood star that died and the estate is a mess. It is probably much more common that you might think for just regular people. There are many kinds of reasons why estates become a big problem. Here are nine things that can help avoid those disputes:
Current Legal Documents. In a client meeting last week, the wife was describing how her father’s estate has been tied up in court for several years because her daddy made out his last will and testament many, many years before but had been telling his children different things about how he wanted his estate to be divided. This created ambiguity that led to the dispute. It is best to have an up-to-date Will or Trust that thoroughly and accurately express your intentions regarding the settlement of your estate. Poorly drafted estate planning documents can also lead to disputes.
List of Assets. Keep good record like an accurate list of your assets and debts – and update it at least annually because it can prevent mistrust between your executor and your heirs. Many estate disputes arise because surviving family members are not aware of what the deceased owned. Also, be sure to note any gifts made during your lifetime.
Personal Effects. Provide for the disposition of your personal effects. If you leave things equally to your two children, it will be simple to divide your money and financial assets into two equal parts, but it may not be so simple to divide the family heirlooms. Often these family heirlooms have little fair market value, but have tremendous sentimental value. Clearly communicate to your heirs prior to your death how you want your personal effects handled. It’s a shame when family members permanently stop speaking because of an argument over the disposition of personal effects.
Communication. Tell your heirs why you are doing what you are doing. It is a last will and testament. Write an informal letter or even make a cellphone video. Imagine the impact of your heirs hearing in your voice why you did what you did. Such a letter or video could be the difference between a contest and a smooth probate succession.
Your Executor. Select an appropriate executor or trustee. Some parents feel that they must designate their oldest child as their executor. You should select the most qualified person for the job, whether or not it is your oldest child. The executor’s job is to gather all of the assets, determine what, if anything needs to be sold, communicate with the heirs regarding the settlement of your estate, follow the Louisiana Succession Procedural rules, work with our office to make sure all legal matters are handled promptly, and ensure the disposition of your estate in accordance with your wishes as expressed in your last will and testament. Often this job is easy, but when an estate gets contested, it’s best to have an executor that can handle the responsibilities that are involved
Your lawyer. Form a relationship with a lawyer or law firm that can help you and your surviving loved ones. Estate planning is not a one-shot deal. As laws and family circumstances change, it’s important to work with a professional you trust that can help you during your lifetime, and then help your surviving loved ones when you are no longer around.
No Contest Clause. Include a “No-Contest Clause” in your Will or Trust. Also, consider providing the heir with something rather than nothing. Make them assess the risk of giving up something or getting nothing. This approach can be very effective in discouraging estate disputes.
Your Will. Make the existence of your Will known. Disputes often arise because of the uncertainty that a Will exists, or because they think that “Dad may have updated his Will.” You should let your heirs know that you have a Will or Trust, and even let them know if you change it.
Beneficiary Designations. Update your beneficiary designations. Do you know that your will and possibly even your trust do not control your beneficiary designated assets? If your IRA still names your ex-wife as the beneficiary, then you have asked for it. Make sure that your life insurance, IRA, and annuity beneficiary designations are consistent with your overall estate plan.
If you do these things, it’s much more likely that your estate settlement will be smooth.
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