Even if your children are grown with families of their own, you can probably remember scenes of sibling rivalry when they were younger. In some families, the competition continues into adulthood; for others, it decreases as children mature. But it can all come flooding back while trying to divide up your estate after your death, as your children argue over who gets what.
If you die without a will or trust, a court will decide, based on state law, who will inherit your property. The result could well be contrary to your wishes. You have worked hard and accumulated assets – house, car, jewelry, investments, family heirlooms, etc. It is risky to simply expect your children to divide your assets evenly or work the distribution out for themselves. It is sure to create problems and mount expenses of probate, and your heirs will have to put up with court-appointed people making the family decisions.
While many people worry about the federal estate tax, the truth is most of us won’t have a tax problem under the current tax laws. But there is another tax that should be considered when formulating your estate plan – the “family tax”. The family tax should be of great concern. It is the emotional “tax” of the hard feelings paid by children and grandchildren when you do not express your wishes legally. It is also the financial price paid by charities that you would have gifted some of your assets to.
You can make it easy on yourself and your loved ones by taking a few simple steps to ensure that your estate is in order. Whatever the size of your estate, large or small, the first step is to have your intentions put in writing. You can do this either in a basic will or a will plus the trust documents that will be needed to carry out your wishes. An estate planning professional can help you make the best decision for your individual financial and family situation.
Once you have a plan in place, it is usually a good idea to discuss your wishes with your family. If a family member has questions about the details, or has any quibbles, you can explain your reasons for structuring your estate plan as you have. Often a simple and direct explanation that makes sense to your family will set their minds at ease, and prevent future hard feelings. While your family shouldn’t dictate your actions, they should be informed about them.
It is also a good idea to discuss division of your personal property. The method of making a list with a description of the property items and who you’d like to have them – with input from your children – can alleviate any hard feelings later.
Putting together an estate plan is not as daunting as it might seem at first, and it pays big dividends in the long run. Not having an estate plan in place can cost you not only in dollars and cents, but could also cost you family discord.