Whether or not we plan to do so, each of us will face death eventually. However, by planning we can make our passing easier and better in many ways for those we leave behind. The first article in the series demonstrated how you could gain privacy from the public by planning and using a trust rather than going through the public probate process. The second article in the series focused on how you can make the transition better through the manner in which you leave your assets to your loved ones. This third article in the series focuses on the importance of communicating your plans to your family to avoid problems after your death.
Death is seldom easy for those left behind. But, it’s even more problematic when inheritances don’t go as expected. Here’s a common situation. A parent, Mary, has three children, Bob, John, and Victoria. Bob and John have lucrative careers, while Victoria is an elementary school teacher. Mary decides to leave all her assets to Victoria because Victoria has greater need. Mary dies without disclosing her plans to her children. When Bob and John discover they’ve been disinherited, they feel hurt. They thought they had good relationships with their mother. So, they begin to look for reasons for this turn of events. Typically, suspicion falls on the child receiving the inheritance. Bob and John think Victoria must have used undue influence or coerced their mother to leave all her assets to Victoria. So, Bob and John accuse Victoria of exerting undue influence and contest Mary’s plan, tearing the family apart in the process. By the time the controversy is finished, Bob, John, and Victoria have frayed relationships and have spent most of their inheritance fighting each other. All of this could have been avoided if Mary had simply disclosed her plans to her children. If Mary had done that, Bob and John would have known Mary still cared greatly for each of them, but simply felt Victoria had greater need. Bob and John would have had an opportunity to ask Mary any questions they had. But, without a disclosure, Bob and John were left thinking the worst.
If you really care about your family and want to help preserve family harmony, communicate your plans to your family. This is especially important if there are any surprises in your plans. Surprises could be: your estate will be divided in unequal shares, your estate is larger than expected, your estate is smaller than expected, shares are being left in trust, etc. Sharing your plans is the loving thing to do, especially if you are planning a disposition that might be unexpected. The next article in the series will examine how to leave an unequal distribution with a lower risk of triggering a challenge to your plan.
Stephen C. Hartnett, J.D., LL.M.
Director of Education
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (858) 453-2128
www.aaepa.com
- Dangers of Do-It-Yourself Estate Planning - July 27, 2021
- Taxation of Nongrantor Trusts - July 20, 2021
- Tax Reporting with Trusts - July 13, 2021
