It is common for people to worry about their most valuable property and the care of their dependent family members when estate planning. It is certainly true that an estate plan should address someone’s most expensive property and the family members who will require legal and financial support if they die.
However, there are also many additional details that could lead to challenges and even disputes among beneficiaries after someone dies. Looking beyond just the most valuable property in an estate may give someone a chance to create a more profound legacy and limit the risk of conflict that could arise among the people they love while they’re grieving. The following considerations often help limit interpersonal conflict during estate administration.
Residuary clauses
Addressing one’s biggest assets is obviously a beneficial decision that will prevent loved ones from fighting over real property and financial accounts. However, it is common for people to overlook their less-valuable belongings, like their personal possessions. Housewares, furniture and even clothing might lead to disagreements among loved ones if people don’t plan for these resources before their death. Adding a residuary clause that addresses any remaining property not specifically named in the estate plan can limit the likelihood of those assets causing a conflict later.
A no-contest clause
When those who expect to inherit from an estate feel disappointed about what they receive or frustrated about what others inherit, they might decide to take the matter to court. People may raise claims of undue influence or question someone’s testamentary capacity because they are unhappy with what they inherited. Testators can add no-contest clauses to testamentary documents like wills so that frivolous litigation will lead to a penalty, possibly the disinheritance of the person bringing the challenge.
Trusts
Wills can achieve many of an individual’s estate planning goals, but they are vulnerable to litigation. While trust litigation is also possible, it is generally more difficult for individuals to challenge a trust than it is to challenge a will. Trusts also provide more control for a testator and allow them to describe the various uses that they approve for inherited property or limits on when and how people can access their inheritance.
Utilizing the right tools and planning ahead of time may allow individuals to significantly reduce the likelihood of a challenge against their estate affecting family relationships and diminishing the legacy they hope to leave behind. Planning carefully to reduce conflict is especially beneficial for those with large estates and/or complicated family circumstances.