Warning signs – will your family fight over your estate?
No one can predict the future with 100 per cent certainty – but we all have the ability to “read some signs” to make educated guesses about what’s likely to happen.
When it comes to increasing your chances for a smooth, conflict-free estate settlement process, there are some warnings that are worth reading. Here are four to watch out for, and plan for, accordingly.
1. Your kids don’t get along: It’s not rocket science – if your kids don’t get along while you’re alive, things are unlikely to get any better once you’re gone. Two or more of your children may not be talking to each other, but you can still talk to each. Make your estate plans crystal clear to all family members, and work to resolve potential issues now to avoid estate litigation later.
2. There’s economic disparity between your kids: You may love your children equally, but chances are your kids aren’t equal, at least not economically. If there’s a large economic disparity, it can lead to problems. For example, let’s say you leave the family cottage to your children. The one child desperately needs money and wants to sell while the others want to keep it in the family. That’s a conflict and a potential fight. This is something that should be addressed in your estate plan after a conversation with your kids about their wishes and needs.
3. Second marriage: You haven’t seen a fight until you’ve seen children rise up to keep a parent’s estate out of the hands of a second spouse. It can get ugly. Yes, you may need to provide for a second spouse after you die, but don’t unintentionally disinherit your kids in the process. Careful planning and good communication is all it takes.
4. You’ve given one child a benefit during your lifetime, but not the others: Let’s say you want to help all three of your adult children with a down payment on a home. You give $100,000 to your eldest but then die unexpectedly before the other two are ready to enter the housing market. While your kids might figure out a way to equalize things, don’t count on it. If you intend to treat your kids equally, make sure any substantial gift already made is reflected in your planning.
The solution? Plan now, talk now
Planning and communication are the key. This article has some great tips on how to make it happen.