Estate litigation is often the result of some easily avoided problems. When litigation arises, it can be costly, time-consuming, and can significantly damage family and interpersonal relationships. Avoiding litigation by creating an estate plan that looks ahead to possible conflicts is an essential part of creating a plan that will benefit you and your family. To that end, here are some simple tips you can keep in mind when creating your estate plan that will allow you to craft a plan that minimizes the risk of estate litigation.
Tip 1. Consider whether siblings should receive equal inheritances.
Crafting an estate plan that ensures you leave your children or grandchildren equal inheritances is sometimes more difficult than it might sound. While leaving equal portions of your estate through your will to each of your children might seem like a good way to do it, it’s always important to consider property that passes outside of probate.
Also, the question of equal inheritances becomes even more complicated when you deal with grandchildren, or mixed marriages. How much should you give to stepchildren? How much should you give to an adult child from a previous relationship, versus a young child from your current marriage? These questions are not always easy to answer, but you will need to think about them before making any decisions.
Tip 2. Remember that many estate litigation issues arise out of personal property.
One of the worst strategies you can use for dividing personal property, family heirlooms, or items that have significant sentimental value is to not address the issue at all. For example, some people choose to distribute personal property by allowing each of their children to take what they want as long as all the children can come to an agreement.
While this might work for families that have no interpersonal conflicts, it’s often a very bad choice for everyone else. When it comes to dividing property that has emotional or sentimental value, it’s best to develop a plan beforehand. Even if you don’t go to the lengths of listing individual property in your will or in a personal letter you write to your executor, you need some kind of strategy in place so your family can avoid the kinds of conflicts that often arise out of personal property.
Tip 3. Gifts, loans, and advances.
Will you give each of your three children an equal inheritance if you’ve already loaned one of them $30,000? If you don’t know the answer to this, you need to address the question before you make an inheritance plan. Giving gifts, advances against inheritances, or loans can cause significant conflicts between family members if you don’t address those issues in your estate plan.