Even if your kids are grown up with families of their own, you can probably remember scenes of intense sibling rivalry when they were younger. In some families, that competition continues into adulthood; for others, it recedes as children age and mature. But it can all come flooding back while trying to divide up your estate after your death as your kids argue over who gets what.
If you die without a will, a court will decide, based on state law, who will inherit your property. In most cases, the result might be contrary to your wishes. Think of all the assets you’ve accumulated: house, car, jewelry, investments, family heirlooms and more. “It is simply not enough to say ‘let them just divide it evenly or work it out themselves,'” says Gerald A. Youngs, president of the National Association of Estate Planners & Councils (NAEPC). This is sure to create problems and expenses due to probate laws, state laws and court appointed strangers making family decisions.
“While many people worry about the federal estate tax, the truth is most of us won’t have a tax problem under the current tax laws,” says Youngs. “But the ‘family tax’ is a very real concern,” he adds. The family tax is the price paid by children, grand-children and favorite charities when you do not express your wishes legally. The family tax is paid not only with money, but also with hard feelings.
But it doesn’t have to be this way. You can make it easy on you and your family by taking a few simple steps to make sure your estate is in order. Whatever the size of your estate, the first step is to have your intentions put in writing, either in a basic will or a will plus the trust documents that will be needed to carry out your wishes. An estate planning professional can help you make the best decision for your situation.
Once you have a plan in place, discuss it with your family. If anyone has any questions about the details, or any quibbles, you can address them and put to rest any future squabbles. While your family shouldn’t dictate your actions, they should be informed about them.
This is also a good time to discuss dividing up personal property. People often arrange for the executor of their will to divide personal property their spouse doesn’t want (such as furniture and jewelry) among their children. Simply leaving it at that can cause problems. It is better to put together a list with a description of the property and who you’d like to have it – if you have specific requests or wishes. You can put this list together with input from your children to alleviate any hard feelings later. (See footnote at end of this article).
Putting together an estate plan is not as daunting as it might seem at first, and it pays big dividends in the long run. Not having an estate plan in place can cost you not only in dollars and cents, but also in family discord.