You can minimize or avoid probate entirely by working with an estate planning attorney. Probate…
Sibling rivalry. Families are prone to old rivalries from the past becoming more evident after the death of a parent. Adult children who are emotionally upset and in the unfamiliar territory of an inheritance process can invent new problems or magnify existing ones.
Protecting Family Relationships
Rivalry issues often present in heartbreaking ways, damaging family relationships and altering the parent’s original intent for estate distribution. It can potentially cost family members significant time and money in litigation. The death of a parent is a difficult test for siblings, particularly in cases where assets are shared unequally.
It is possible to avoid many inheritance disputes with some forethought if a parent implements a few key steps before and after death with sound estate planning. Comprehensive estate planning includes a will and trust with a non-sibling trustee or executor and the chance for equitable gift-giving during the parent’s lifetime, providing the opportunity to elaborate on or defend their decisions. Non-family fiduciaries who can act in the estate distribution include an attorney, CPA, or other financial institution that provides this service. Professional services may be well worth implementing as a strategy to diffuse issues between contentious family members.
Gifting to Children Before Death
One technique for a parent to quell potential issues is to legally gift up to $16,000 annually to each child without owing taxes on those gifts and spending down the estate’s cash assets, so there is less to argue over. You can’t argue about assets that have already been gifted. Every parent has the right to do whatever they choose with their money during their lifetime.
Using Neutral Parties to Distribute Assets after Death
After a parent dies, a mediator is particularly useful if one of the family’s adult children is the executor or trustee of the estate. The mediator remains neutral and can counsel all siblings about the estate’s distribution process while helping to keep emotions on an even keel. A mediator can also help executors or trustees formulate a plan to liquidate estate assets and split the proceeds among heirs, sometimes using the services of an independent fiduciary for assistance.
Income Disparity Among Siblings
Sometimes sibling economic disparity creates different perspectives about what is fair. Suppose a financially stable adult child prefers to hold onto an inheritable asset for a long-term payout while another heir in greater need requires an immediate return. A mediator may aid in negotiating the sale of that interest to the more financially stable heir while cashing out the other sibling, keeping the deal within the family.
Situations that Can Lead to Contesting the Will
New spouses and step-children, disabled and dependent siblings who require care, and estranged children are very likely to mount challenges to the status quo of inheritance if they feel they are being unfairly compensated. Legal actions citing undue influence for personal gain are not uncommon but can be difficult and expensive to prove. It is legally permissible for a parent to leave a child out of their will. To avoid legal challenges by the disinherited (and likely disgruntled) child, the parent should discuss their reasons with the child upfront or explain the decisions they made in their will.
Letters of Intent
A handwritten letter of instruction for gifting family keepsakes can outline who gets what and, although it is not legally binding, can be helpful in most circumstances. Without written guidance, how siblings choose to distribute heirlooms among themselves is left to chance. Try to establish an agreeable framework among siblings in advance. Once someone digs their heels in about a certain keepsake, they can quickly lose objectivity. While it doesn’t make sense, there are instances where sibling litigants spend more money trying to win a family heirloom in court than the object itself is worth. A systematic approach agreed to upfront can circumvent these emotional responses to family keepsakes.
There are as many potential problems to resolve in estate distribution as there are personalities. However, parents usually know which children are likely to fight over their inheritance. Action that prevents conflicts among heirs while a parent is alive is the most direct way to solve the problem. A parent can also make changes to their plans as financial circumstances and feelings among siblings change.
Reviewing and revising your estate plan to account for marriages, deaths, divorces, and births shows that heirs receive due consideration, decreasing the potential for conflict. An estate planning attorney can advise you about gift-giving while you are alive and create an estate plan that reduces the chances of sibling rivalry and infighting after your death. Proactive planning and honest discussions with your lawyer can help craft a plan that provides the best opportunity for peaceful outcomes among siblings.