It happens far too often. Everyone seems to get along fine at the holidays and family reunions. But when a patriarch or matriarch of the family dies, the fighting begins. Dividing up an estate can become an ugly matter between siblings, spouses, and other family members.
What does a family estate battle mean? Every family is different, as are every family’s financial circumstances. But when the belongings or bank accounts of a deceased person come into question, any uncertainty over how those assets are going to be distributed can cause tension within a family.
Ideally, everyone would get along and split assets in a fair way. But that doesn’t always happen. Estate battles can and do happen every day, which is why taking steps to prevent them may be a necessity.
What causes a family to fight over an estate?
There can be many reasons a family fractures over a loved one’s assets. The death of a loved one is a stressful and emotionally taxing time. Uncertainty contributes to anxiety, and not knowing what will happen with an estate can heighten emotions even more. Second marriages and step-siblings, old sibling rivalries that never completely went away, varying levels of financial need among family members, caretaker dynamics within families, and different ideas of how property should be handled are just a few examples of what can affect family relationships and sometimes turn things sour. The management of your estate could be disputed amongst your family if:
You have a surviving spouse or longtime companion
Your spouse/companion is not the parent of your children
You have step-children or children from multiple marriages
You have an estranged adult child or several estranged adult children
You have dependents
You want to leave some of your possessions to a friend who is not related to you
Or for many other reasons. Disputes will often arise over who is to inherit what. Whether it comes down to a piece of jewelry or your life savings, your family home or a real estate portfolio, those set to inherit it may not see eye to eye. If you have only one heir and that fact isn’t debatable, there’s less likely to be a fight over inheritance. But if you have multiple family members you want to leave your possessions to, getting everything in order can stop any fights before they happen.
Outcomes of family estate feuds
Without the proper planning in place, the handling of your estate will have to happen during an already stressful time for your family. Without a Will, the probate court system will have to intervene to determine how your estate is divided. This process can take months to be settled. Your bank accounts will be frozen until a beneficiary is determined. And without a record of them, your material possessions (jewelry, gold, cash, collectibles, clothing, and other valuables) might be – to put it bluntly – quite literally up for grabs to whoever gets to them first.
But it’s the emotional toll of estate feuds that can do the most damage to previously amicable families. Fighting over money and property, with one side feeling slighted or unfairly cheated out of something, can cause lasting resentments and sever family ties permanently. Failing to put binding legal protections in place can leave a family vulnerable to predatory individuals. And, maybe most of all, it can mean that things may not be done the way you would have wanted.
What you can do to prevent a battle in your family
While you know you won’t be able to look after your family forever, you can set things up so that things will be fairly and peacefully handled once you’re gone. You may want to consider making an Estate Plan if:
You have dependents
You have more than one child
You want to leave assets to family members other than your spouse
You want to leave assets to family members other than your children
You own a house or multiple homes
You own a business with or without business partners
You have a number of valuables
Creating an Estate Plan can also help you clarify some things that can come up during an illness or at the end of a person’s life, including:
DNR Status/Living Will
Medical Power of Attorney
These designations relate to important decisions that one or more of your family members may have to make. Being clear about your wishes can help your family stay on the same page and can minimize any of the conflict and feelings of helplessness that can come up during an illness or death.
Make a Will
There are several types of ways to do this, but creating a legal and official Will that is recognized by your state is the best way. In your Will, you’ll address matters like which parts of your Estate you will be leaving to which family members, how property will be divided or managed, and if anyone is to be excluded from inheriting your Estate. Along with your Will, you can also include a list of non-titled valuables – as specifically or generally listed as you want – and who will receive them.
Put Assets into a Trust
Trusts can be set up to ease the transfer of property or to help a family member manage funds. If you intend to leave real estate or a large amount of money to one or more members of your family, you may want to consider creating a Trust as part of your Estate Planning, including:
A living trust, which you use and will then pass to your spouse or another person of your choice
An irrevocable trust, which can protect assets against creditors and may be used for Estate Tax planning
A spendthrift trust, which distributes a set amount of money to the Trustee
Use the right documents
Inheritance rules and community property varies from state to state. Some states will see that provisions are made for a surviving spouse, some won’t. A dear family member or friend may be overlooked if not mentioned in a legal Will. And only you know what is best for your family’s situation. That’s why using Customized, State-Specific Estate Planning documents is so important. A qualified Estate Planning professional can answer your questions about making a Will, changing a Will, creating a Trust, and more.
Family fights aren’t always avoidable, but arguments over an Estate don’t have to happen. At Trust & Will, we’re here to help you get through your Estate Planning process. Contact us today to get started.