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Estate Planning: Keeping the Peace Among Your Heirs, pt. 2


a gift of moneyPart of the mission of Clarity Financial Planning is to help you take care of your loved ones and leave them a legacy if possible. What you don’t want is your good fortune to cause problems after you are gone.

In “Head Off Squabbles Among Your Heirs,” Kiplinger offers suggestions for things you can do to distribute your wealth in a way that hopefully reduces arguments. If you foresee tension, make someone other than an heir the executor. Depending on your state, you may be able to include a “no contest” clause, which means that anyone who contests the will or trust will lose the right to inherit.

Real Estate: Rather than letting your heirs figure out how to manage a property, such as a vacation home, as a group, Kiplinger suggests that you “…put the house in a limited liability company and then leave interests in the LLC to your heirs.”

Remarriage: You can have a prenuptial agreement in place when you remarry to outline what your children will get and what your spouse will receive upon your death. However, if you didn’t draw up such and agreement when you remarried, you can set up a marital trust later. This type of trust can outline what your spouse will get, for example, “a qualified terminable interest property trust (QTIP), which can provide income to your surviving spouse for her lifetime while preserving the underlying assets for your children from your first marriage.”

You should also keep the beneficiaries on all of your financial accounts and insurance policies up-to-date. We’ve written about one case that went all the way to the Supreme Court because someone did not update a life insurance policy upon remarrying.

There are some estate planning issues that require a lawyer’s assistance but for the financial aspect of things, a Fee-Only financial planner can help you get things in order.