You may have created the perfect estate plan, but your heirs can easily end up in conflict and your estate in dispute — especially if the provisions of your trust or will come as a surprise.
Even if your plans are simple, discussing the details of your estate plan with heirs and family members can help you deal with disagreements or controversies before you pass away.
Communicating your intentions ahead of time is a simple concept, but many people choose not to do so, regardless of the consequences. Studies show that less than one-third of persons discuss their estate plans with their children. Over 20 percent of bequest recipients quarrel over inheritance issues. 63 percent of families reporting no disputes over inheritance issues say they had advance notice as to what to expect — and over 80 percent felt they were treated fairly.
In short, talking about your plans with the people involved can make a world of difference.
If the provisions of your will or trust are unusual or differ from state intestacy guidelines, communicating with everyone involved is even more critical. If, for instance, you plan to leave 80 percent of your estate to one child instead of splitting it evenly between two children, let everyone know the reasoning behind your decision. Simmering resentments can easily boil over into open conflict when a child is surprised by what he or she perceives as unfair treatment.
The better your heirs understand your logic, the less likely they are to contest your estate plan. And if there is conflict, you’re still there to help work your family through any tension.
You can also help reduce conflicts by including a “no-contest” clause. In essence the no-contest provision translates to, “If you contest this Will or Trust, you forfeit your inheritance.” Keep in mind that if you disinherit an heir completely, though, the no-contest clause is ineffective since the heir has nothing to lose by contesting.
Here’s the bottom line: Make things clear during your lifetime. It’s often a mistake to assume everyone will graciously accept your intentions and will “do the right thing.”
Avoid conflicts after your death you could have settled during your lifetime by communicating openly and honestly with your heirs while you’re still around.