Planning To Avert Family Disharmony
Your kids fought over who would sit in the front seat of the car. Do you really think they’re going to agree about dividing your estate? Not likely as every probate attorney can tell you horror stories about families torn apart by greed and old animosities upon the death of a parent.
That’s why in many cases a parent’s most lasting gift isn’t money or tender memories—it’s the steps taken to avoid family dissension. And, these don’t have to be complicated.
Put aside the idea that the kids have to know everything. Why tell them the terms of your will? Don’t put the document up for debate—it’s your money and possessions, and you can leave them to whomever or whatever you please. You are only asking for trouble if you disclose that one child gets the valuable silver while the other gets your warped vinyl records. Besides, you may change your mind and your will several times. You don’t want your kids to contest your last will because they know the prior will contained more favorable terms. You also don’t want them to skimp on your care so they can maximize their inheritance.
Don’t take steps that will pit one child against another. If you have a lot of assets, make a third party your fiduciary, not your child. This means naming a bank or other qualified company as a trustee of your trust, or the executor of your estate. They are educated in the complex obligations involved in a fiduciary relationship. You don’t want to create a situation where one child is suing another one over perceived or actual financial mismanagement.
Keep your children’s spouses out of it. They will throw a wrench in the family dynamics every time.
If you decide to transfer some money to a child now, document it. Otherwise there will be arguments about whether it is a gift to the child, or a loan that should be repaid. If it is a gift, there may be an argument about whether that needs to come out of the child’s share of your estate after you die. You can paper it down now, or include a clause in your will addressing it. Sometimes children who provide a parent personal services, such as care, transportation, financial management or meal preparation, claim that they should receive additional money from the estate after the parent passes away. The claims usually aren’t valid, but are guaranteed to lead to family discord. You can solve that by either signing a written agreement with your child setting out the terms of compensation, or leaving an instruction in your will that such services are to be considered as rendered out of affection and not subject to payment.
A lot of wills include an “in Terrorem” clause stating that anyone contesting the will forfeits their share of the estate and will only receive one dollar. The problem is that these clauses are often too broad and punish a child who raises legitimate legal or administrative claims. A better approach is to narrowly draft the clause to limit it to someone trying to throw the entire document out by raising a claim of undue influence or your competency.
A little advance planning on your part could save your family’s relationships. Think about it.