09 Dec Why Families Fight Over Inheritances (and How to Avoid Disputes)
Inheritances are meant to be a way for you to pass on assets and wealth to the next generation, providing financial security and comfort for your loved ones. However, settling a loved one’s estate can be an emotional process. And it’s even more stressful when siblings and other family members start to fight over who gets what.
Understanding the reasons behind these conflicts and how to prevent them is crucial. Let’s take a look at why families tend to fight over an inheritance, and what you can do about it.
Why Do Families Commonly Fight Over Inheritance?
There are many reasons why families fight over inheritance when a loved one passes away, including:
- Unequal distributions, or perceived unfairness
- Miscommunications about your final wishes
- Old-fashioned sibling rivalry
- Emotional attachment to certain assets, such as the family cabin
- Varying financial needs between beneficiaries
- Complex family dynamics, such as blended families, estranged family members, etc.
- A sense of entitlement to assets like the family business
- Greed over a wealthy estate
Even ex-spouses may get involved, making things extra messy. But much of the time, these disputes are caused by a poorly executed estate plan or the lack of one altogether.
How to Avoid Family Disputes Over Your Property
Draft a Will
It’s important to draft a will that specifically states how you wish your assets to be distributed as soon as possible. If you die without a will, the court will pass your assets to your next of kin however they decide is best.
For instance, your surviving spouse could inherit your entire estate, even if you have children together. If you don’t have a legal spouse or children, the estate would go to your parents, leaving out your domestic partner, siblings, etc. Distributing your assets this way can easily lead to arguments.
Be Specific
Just because you write up a will doesn’t mean it’ll be effective when the time comes. People can still get left out or become angry due to unclear instructions. Being specific in your designations and instructions will help avoid uncertainty about your wishes.
For example, you should list every individual by first and last name instead of grouping people together by relation. For example, simply saying “my children,” any stepchildren you have will not legally receive an inheritance. You need to specifically list which asset each person is to receive, how it should be given, and how much of it they will get at once. And don’t forget to name contingent beneficiaries, just in case your first choice refuses the inheritance or passes away before you do.
The clearer the language you use, the less likely someone will contest the will and the less likely there will be fighting among family members.
Consider a Trust
Even if you do leave detailed instructions on how to distribute your assets, your estate will still need to go through probate if a will is your only estate planning document. This long, expensive court process of validating your will and administering your estate can take months, even a year to complete.
However, you can avoid probate by placing your assets in a trust so that they automatically transfer to your beneficiaries after you pass. Just make sure that you fund the trust by transferring ownership of the assets, and choose a trustworthy successor trustee who will manage and distribute the assets for you.
Divide Your Assets as Fairly as Possible
A good way to prevent a fight is to divide everything equally, but that’s not always possible. You may wish to leave a larger inheritance to one of your children because they struggle financially, or you may want to leave an important heirloom to the person who values it most.
Unequal division of assets can be frustrating for your family, even if your decisions make sense. To avoid tension, you need to explain your intentions to all of your beneficiaries ahead of time.
Communicate with Your Beneficiaries
If you want to prevent a dispute, communication is key. Whether it’s about the distribution of your assets or the designation of a role, it’s essential to communicate your decisions with everyone involved.
Keep your beneficiaries informed of any changes you make to your will or other estate planning documents so they know exactly what to expect. You also need to discuss any roles you assign, like executor, trustee, or guardian, with that person in advance so they fully understand the responsibilities.
Create Your Estate Plan with a Professional
A professional estate planning attorney can help you create a thorough estate plan that eliminates uncertainty and can even prevent family disputes over their inheritance. The experienced team at Phelps LaClair is here to assist you with all of your estate planning needs. If you’re interested in scheduling a consultation with us, please give us a call at 480-892-2488 today or check out our next free estate planning webinar.
Images used under creative commons license – commercial use (12/9/2022). Photo by Alex Green on Pexels