Part 5 of our Series
Sources of Family Conflict in Estate Planning
1 out of 3
I know an attorney who retired and moved to Western North Carolina from Florida. He became a client and then a friend. He had formerly been an Estate Planning Attorney in Florida. I asked him how often there was acrimony or ill will, but not necessarily a lawsuit, when he was doing the after death settlement of a Trust or the Will. He said immediately, “1 out of 3”.
Remember, Greed is one of the Seven Deadly Sins. Try to limit its effect in your Estate Plan. Here are some ways to limit conflict:
Do you want Remarriage Protection for the surviving spouse? If the surviving spouse remarries, does the new person need to sign a prenuptial agreement to try and help secure that your Family’s Money stays with your family as opposed to moving to the new spouse’s adult children?
Do you want Protective Trusts for your adult children? We are told that the divorce rate in America is 57.7%. One-half of the inheritance may leave with the spouse leaving your adult child. Also there is the risk of a Car Wreck Lawsuit, where your child has an accident that is their fault. Their inheritance could be at risk if the inheritance is titled in that child’s name.
If a Family Member, Friend, or Trusted Advisor is a Witness to Family Abuse or the taking advantage of mom, dad, aunt or uncle, they need to take action and work with the Estate Planning Attorney to make sure that steps are taken to protect that client. Many people get into a weaken stage as they age and their Mental Capacity declines. Some get taken advantage of by fraud. This can be by a stranger, or a family member.
Keep your Estate Plan Current. Your assets, relationships and the laws are constantly changing.
You can set out “Consequences” in your Estate Plan. You can require that the beneficiary pass a drug test. You can offset loans or advancements to certain adult children. Many people want to do that because they have been gifting money to one wayward or non-achieving adult child and do not want to punish their hard working and effective adult children who did not receive advancements on their inheritance.
“Contest Clauses” are very important in Estate Planning. You should have a very detailed Contest Clause that disinherits anyone who attempts to set aside your Will, Living Trust, or on the named Death Beneficiary Designations on Retirement Accounts, Annuity, or Life Insurance Beneficiaries. Your goal is to make it so painful for the attacking party that they won’t attack. This is a very important deterrent to an attack on your Estate Plan.
Your goal in all of this is to have your loved ones still talking to each other when the after death settlement is completed. If you set it up ahead of time, you can limit the Estate Plan’s exposure to attack. Then you are in a much better position to have your desired goal of moving your assets out to your loved ones with as little wear and tear as possible met.
As you can see, there are a myriad of issues in estate planning just around family dynamics and the conflict that can be caused. We hope this series has been helpful to you. To recap:
At the Law Firm of Steven Andrew Jackson, Attorney and Counsellor at Law, we have helped hundreds of families protect themselves and their loved ones, avoid Estate Taxes and Probate Costs, and keep their Estate Plans current with the law through The Customized Protective Estate Planning Solution™.