- calendar_month August 30, 2024
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Whatever the size of your family having an estate plan can help you avert disaster. The cruelest thing you can do to your heirs is handle your estate planning nonchalantly.
Here are some common inheritance situations that can be potentially explosive.
- Inaction: When you ask your parent about his or her estate plans, they respond with "Oh, look at the time. I'm late for golf lessons."
- The caregiver conundrum: You moved back in with your parents to be their cook/chauffeur/nurse's aide. In return for this, they rewrite their will to leave you the biggest portion of their estate.
- Trust issues: You want to leave money to all your kids, but you're concerned about one that has a fondness for blackjack tables.
- A blended family: At the risk of sounding like the evil stepparent, you want to leave your assets to your new spouse and your kids from a previous marriage - not to your stepchildren.
- It's a business: Your family business is your passion and life's work. Only one child has been involved, but you have two other kids. How do you create a plan that doesn't turn into a TV drama?
- Skipping generations: Your kids seem capable and secure as adults, so you've decided to mostly bypass them and pass your wealth to your grandkids instead.
- False expectations: Your kids think you'll be leaving them caviar and champagne, but all they are getting is pretzels and beer.
Having inheritance conversations with your family early while you are still alive can make a world of difference. Keep track of the hours spent on caregiving and the money used on expenses to help disgruntled siblings understand why you are giving more to one of their siblings.
Set up a trust and distribute money at certain ages to encourage positive behavior and restrict funds to children who engage in harmful activities, especially those with bad habits. Leave money to support a surviving spouse while designating that, upon the spouse's death, the remainder go to your children. You might also want to give children of blended families something directly upon your death so they are not waiting for their stepparent to die.
Hire an estate planner to guide you through the process. The last thing you want to do is create a time bomb.
