There are several threats and obstacles to successful estate planning that need to be overcome. Poor estate planning can lead to heartache, confusion, expense, and even disaster for the loved ones left behind after the death of an estate holder. Without adequate planning and clear instructions, families experience conflict and uncertainty that can almost always be avoided with forethought and proper care. And while this care starts with meticulous document preparation, it doesn’t end there.
According to a TF Wealth survey of over 100 estate planning professionals, the primary obstacle to peaceful inheritance planning is family conflict. If children are treated differently under the estate plan, family members often assume a mistake was made during the drafting process or that someone has exerted influence over the estate-holding parent. This may not be the case, but seeds of doubt and hostility are easily sown and not easily corrected. Family members can mistrust or think the worst of each other, and without clear guidance from the departing parent, this mistrust can grow unchecked.
Sloppy or Non-Existent Planning
In the absence of proper and careful planning, an estate will be subject to the state’s intestate laws. These laws predetermine the family members who inherit assets and in what proportion. And while these statutes work for some families, they may be grossly inapplicable to others. They can have tragic outcomes if estate holders have been married multiple times, have children from multiple relationships, or have children who require special forms of asset protection. If any of these apply to your situation, poor planning can leave the nuances of your legacy in the hands of a state government with no regard for your specific wishes or needs.
In order to protect yourself, your family, and your legacy from the vagaries of fate, engage in thoughtful planning with the support of a qualified attorney.
Surprises and Miscommunications
If you actively intend to treat your children (or other family members) differently, be honest and forthcoming about this. Have a conversation, or a series of conversations, prior to your death so that all necessary parties understand why you are making these decisions. Even if you’d rather not discuss your decisions with your family, you should discuss them with your attorney so that the plan can be understood and executed in accordance with your wishes.
Reduce Costs and Taxes
Taxes and fees can whittle away your estate as your family members stand by and watch in helpless frustration. This may be an unpleasant and possibly frightening experience, but you can prevent this from happening by focusing your estate planning goals on benefiting your family first and the government second. A qualified estate planning attorney can help you handle your assets in a way that reduces the administrative costs of your departure and minimizes income and estate taxes.
Choose a Representative
During the later stages of our lives, you may find yourself struggling to handle your financial or health affairs and requiring the support of a loved one. Choose your designee carefully, and emphasize trust over convenience. For example, choose the family member who understands your wishes the best, not just the family member who lives the closest to you. And don’t leave it to others to make assumptions about who this person might be. Establish clear and proper channels of authority using a trust, a will, and power of attorney.
Keep Your Wishes Understandable and Executable
Your assets may represent your legacy, so put serious thought into how you want to distribute them after you’re gone. Again, don’t make passing decisions or decisions based on convenience. Consider including explanations as to your thought process. If you would like a family member to make specific use of a gift of money, he or she may appreciate hearing about your hopes and wishes.
Every time you experience a life change (for example, the birth or death of a family member, the purchase or sale of a major asset, or a change in health status), please take some time to update your estate planning documents. Stay in touch with your estate planning attorney as the years go by. Contact our office when you undergo a life change, and we will contact you when laws change that relate to your plans.