The wake of the last remaining parent’s death is a large one for most families, and the complicated emotions around that death pose challenges of their own. This is especially true when the estate plans are not updated, are unclear, or nonexistent.
7 Tips to Settle an Estate Without a Fight
The following tips can help your family settle an estate without conflict.
Create an estate plan with an estate planning attorney
The best thing you can do to help your family navigate the wake of your death is to have a legitimate estate plan in place. If you haven’t done that yet, you are doing your children a grave disservice. We have seen the fraught tensions and relationship strains that occur when children must settle an estate without clear directions. It can be a nightmare, and it can lead to permanently fractured relationships.
Use our Ultimate Estate Planning Checklist to get started.
Then, find a qualified estate attorney in your area and get your affairs in order. The attorney will take a big-picture look at your assets, finances, and your long-term goals and help you prepare an estate (possibly a trust) that supports you now as well as into the future. Read, What to Ask Before Hiring an Estate Planning Attorney.
Do not use a child as a trustee or executor
Somehow, people got it into their heads that designating the eldest or favorite child as your estate plan’s trustee or executor is a good idea. It is not. The best person for the job is someone who you trust but who can remain objective, upholding the guidelines and timelines that govern the estate settlement process. It should also not be someone who will be utterly emotionally devastated by your death. To put a grieving child in this position is unfair. It also places him/her in the position to be pitted against siblings if there are disputes about the estate.
Visit Naming a Trustee is a Big Decision for more information on that topic.
Suppose you don’t have a close family friend or a more impartial relative you can assign to the job. In that case, you can always designate your attorney as the trustee, which takes the sibling fight out of the equation because the estate is settled impartially.
Have your POA and Advanced Medical Directives in Place
Sometimes, the tension or fight in a sibling or family group happens long before the estate plan comes into play. If parents don’t have a solid Advanced Medical Directive in place, complete with a Durable Power of Attorney (DPOA), children must decide which measures, if any, are to be used in a medical setting.
If there are disagreements amongst your children on how far things should go to sustain your life, the rifts often continue into the estate settlement process if there isn’t a solid estate plan in place. Click Here to learn more about why planning for incapacity is an essential step in estate planning.
Make your estate plan “public”
Our culture isn’t very open when it comes to discussing finances, death, dying, end-of-life care, etc. Unfortunately, this secrecy and “pretend we’ll all live forever” take on things is detrimental to estate planning. Firstly, it keeps people from creating estate plans early and from revisiting them often. Secondly, it leaves heirs and beneficiaries in the dark. Therefore, we advocate for clear communication with family around estate planning whenever possible.
Have a family Zoom meeting and discuss your first draft of the estate plans with your children. Here, you might find that a particular piece of art is actually more precious to one of your children than it is to a grandchild you left it to, or that one child feels another should have a larger share of the financial pie because they have more financial struggles, etc.
Then, you can make changes accordingly. Potential hiccups or estate plan discrepancies are better worked out while you’re still alive so the plan is understood. Once your estate plan is complete and filed with your attorney, give each of your children and other relevant parties (your trustee, POA, etc) copies. Don’t forget to distribute new copies whenever your plan is revised.
Distribute assets while you’re still alive
If you need every penny you have while you’re still alive, that’s one thing. However, we often advise that clients begin distributing assets in the form of financial gifts (adhering to tax guidelines to prevent children/beneficiaries from being taxed). For example, did you know (in most cases) you can gift family members up to $15,000 annually without being taxed? Or that you can pay college tuition or medical expenses for another person without it counting towards their income (aka tax-free money?). Click Here to visit the IRS’s FAQ Page on Gift Taxing.
Distributing money and assets (art, furniture, collectibles, etc.) while you’re still alive is a win-win. Most importantly, you get to be a part of sharing in their pleasure and enjoyment of your generosity. Also, distributing those assets now leaves no question about what your intentions were or weren’t, reducing siblings’ tendency to squabble over the estate.
Your estate planning lawyer is there to guide you and provide relevant advice to optimize gifting and bequeathing.
Tag items per your estate plan
Once your estate plan is complete, walk around the house or storage, used use masking tape or a sharpie, and mark items on the back with the name (and history) of a particular item. The combination of your itemized will or trust, and the well-marked or tagged items leaves no room for argument, even if a sibling is unhappy with a particular decision.
Enlist help from a probate attorney to settle an estate
If you are in the midst of a sibling fight over your parent’s estate plan, contact a probate attorney ASAP. The simple act of turning it all over to an objective party who knows the ins and outs of probate can relieve the tension and give everyone faith that the estate will be handled to the letter of the law. We act as both trustees and mediators, which can preserve sibling relationships when you need them most.
Would you like support creating an estate plan or navigating the settlement of a complex estate? Schedule a consultation with Tseng Law Firm.