Squabble-free estate planning

Created date

March 1st, 2016
last will and testament document
last will and testament document

Wherever money and family are involved, conflict tends to quickly follow. You may feel anxious about your estate planning because you don’t want to cause squabbles among your heirs. But, with some careful planning—and lots of discussion—you can make sure inheritances you leave are received in the spirit in which they were intended.

“Statistically, lack of communication and trust, and unprepared heirs are what is responsible for over 80% of family wealth destruction and the destruction of family unity,” says Brian Luster, CEO and cofounder of The Abernathy Group II Family Office (abernathygroupfamilyoffice.com), a boutique wealth management firm. “By opening up the lines of communication early on, and utilizing tools such as regular family meetings and pre-inheritance experiences, families can often overcome these challenges.”

One of the biggest potential sources of conflict is when one sibling receives a bigger inheritance than the others. But, there are many legitimate reasons parents decide to give one child a larger chunk of the estate. Perhaps one child married into wealth while another works in a low-paying field. Or, maybe one child went above and beyond as a caregiver, and the parents want to compensate him or her. Whatever your reasons for an unequal distribution, Laura Troyani, founder of PlanBeyond, a website that helps people deal with end-of-life issues, says you can help keep peace in the family by talking candidly about your choices.

“Set time up to talk them through your final wishes and make a point of explaining anything that might be confusing or hurtful,” Troyani says. “You don’t want to leave them thinking you had a favorite.”

Strategies to avoid conflicts

Jim Ciprich (regentatlantic.com), an investment advisor in New Jersey, says there are estate planning strategies you can use to reduce the risk of conflict among heirs after you’re gone. One option is to reduce the size of your estate by employing lifetime gifting strategies. 

“By making gifts to children while mom or dad are alive, there may be less anticipation to receive a large inheritance at death,” Ciprich says.

Another strategy is to put a no-contest clause in your will. Ciprich says this discourages heirs from challenging the validity of the will by significantly reducing their share if they attempt to sue the estate. Consult an attorney to determine if this strategy is appropriate for you and whether it is effective in your state.

Careful estate planning is particularly important in blended families. Ciprich says people who remarry run a significant risk of unintentionally disinheriting their children. 

“Some couples like to keep their money separated in these instances and leave assets to their children from prior marriages; others will comingle assets for the benefits of the surviving spouse,” he says. “Either way, there needs to be documentation of how assets will transfer at the first spouse’s death as well as the surviving spouse’s death to minimize conflicts between siblings and step-siblings. This is particularly important if one spouse brought a disproportionate amount of wealth to the second marriage.”