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Estate Planning: Keeping the Peace Among Your Heirs, pt. 1

a gift of moneyIn “Head Off Squabbles Among Your Heirs,” Kiplinger offers estate planning advice for those who are concerned not only with leaving something for their heirs but also with preventing tensions over the distribution of these assets. Keep in mind that you are within your rights to divide your assets as you wish but be aware that your choices may affect your heirs for years to come.

Equality isn’t enough: Parents who think the simplest thing they can do is to divide their money among their heirs equally may not realize that this can still lead to tension. A child who is struggling may be upset that he or she was not left more in light of their situation. Any children who took care of their parent(s) may feel entitled to more because in their minds they did more.

Extras count: The article outlines a number of situations where a child or heir will get more and you may not realize it. If you add a child to a bank account because you are incapacitated, this child may automatically get what remained in that account after you are gone. When dividing up assets such as furniture, keepsakes, and knickknacks, so keep in mind that some of these items may be more valuable than others. Some will have great sentimental value; others may have great monetary value.

Overall, communication is key. Shocking surprises in the lawyer’s office make for great drama in fiction but are a lot less pleasant in real life. Ask your heirs what items they might want. If you have a business, make sure the succession plan is clear. Whether you discuss your estate planning decision-making process with your heirs while you are able to or leave a detailed letter with your executor, communication can go a long way towards keeping the peace.

Next week we’ll look at some estate planning strategies you enact to help smooth out things for your heirs.