Creating a comprehensive estate plan is an important step in managing your affairs and in better ensuring that your loved ones are taken care of after you’re gone. However, even with the best of intentions, how you choose to approach your distribution of assets can lead to disagreements and fights among your kids if you don’t plan to minimize the risk of such occurrences.
One of the most effective ways to prevent disputes over your estate is to have open discussions about your estate plan while you’re still alive. If you explain your decisions clearly and listen to any concerns your children might have, you’ll effectively give them a forum to express themselves which can minimize feelings of resentment or surprise later on.
Structuring your estate plan
Communication is important. But so is how you ultimately structure your estate plan. The decisions you make now can significantly impact the risk that disputes will or won’t arise later on. For example, ambiguity in wills and estate plans often leads to conflicts. As such, you’ll want to be clear about who gets what, including specific items of sentimental or monetary value. If you want to leave certain possessions to specific children, spell it out in your estate plan to avoid confusion and arguments.
Additionally, you may want to manage your estate utilizing resources beyond a simple will. For example, trusts can be an effective tool for reducing estate conflicts. They can allow you to control how your assets are distributed over time and are managed by a trustee, which can help to minimize disputes among those who would otherwise seek to interpret your wishes in their own self-interest.
Finally, if you are particularly concerned about estate disputes, you may want to consider integrating a no-contest clause (also known as an “in terrorem” clause) into your plan. This inclusion can discourage disputes by stating that anyone who challenges your will or trust will be disinherited. While not enforceable in all states, and not always effective, it can serve as a deterrent to potential challenges.
As you move forward, keep in mind that you can always seek personalized guidance if you have concerns about minimizing the risk of disputes. Additionally, don’t forget that regularly reviewing and updating your documents can help you to ensure that they reflect your current wishes and circumstances, reducing the likelihood that concerns will be raised by your beneficiaries once you’re gone.