Author: Simon Volkov

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California real estate investor, Simon Volkov, pro

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Using Estate Planning to Reduce Family Disputes Over Inheritance By Simon Volkov

  in Family Concerns | Published 2012-07-19 03:03:09 | 68 Reads | Unrated

Summary

No one wants to think family disputes over inheritance will be an issue, but it happens all the time Death tends to magnify existing family dysfunction, but can also be the catalyst for inappropriate behavior during the grieving process

Full Content

No one wants to think family disputes over inheritance will be an issue, but it happens all the time. Death tends to magnify existing family dysfunction, but can also be the catalyst for inappropriate behavior during the grieving process.

As a probate liquidator, I've witnessed family disputes over inheritance erupt in courtrooms and law offices. I've watched families be torn apart because a relative contested the Will to lay claims to something they didn't receive in the decedent's last Will.

While there is no ironclad way to prevent inheritance wars, engaging
in estate planning can reduce the potential. The best strategies to reduce potential for heirs contesting the Will are to transfer estate assets to a trust or assign beneficiaries to exempt certain types of property from probate.

Every estate within the U.S. is required to undergo probate unless estate assets are placed into a trust; protected by assignment of beneficiaries; gifted to heirs prior to death; or estate values are small enough to be exempt.

Probated estate settlement duties are assigned to a personal representative designated within the last Will. If a person dies without executing a Will, a personal representative is appointed through court and assets are distributed to heirs according to state probate laws.

A last will and testament is also necessary for establishing a trust. Wills provide important directives regarding estate settlement including: appointing a personal representative; establishing guardianship; and bequeathing general and specific gifts to individuals. It can also be used to disinherit relatives.

Disinheriting heirs is not common practice, but there are times when it is necessary. Individuals that want to intentionally write relatives out of their Will must include a disinheritance clause that provides reason as to why the heir is not entitled to estate assets. While this clause does not guarantee disinherited heirs won't contest the Will, it can reduce the potential.

A no-contest clause can be inserted when there is concern that heirs will contest the Will. This clause states any heir that contests relinquishes rights to gifted inheritance property. Again, this can't prevent a person from filing lawsuit, but is a good deterrent.

It can be helpful to hire a probate attorney when family strife exists. Attorneys can help individuals engage in estate planning practices that protect estate assets from undergoing probate and implement strategies to minimize family arguments.

One of the most common causes of family feuds is who should be appointed as estate administrator. If appointing a relative to this position increases potential for inheritance war, consider hiring a probate litigator or lawyer to manage the estate.

Hiring a neutral third party increases estate settlement costs, but can save the estate money if litigation occurs. The cost to defend contested Wills can quickly bankrupt small estates. If the estate does not have adequate cash the estate administrator will be ordered by the court to sell valuable property; leaving little to nothing for heirs.

It can be helpful to host a meeting and ask family members to claim items they want. It can be odd to lay claim to a loved one's belongings. If the process is uncomfortable have family members write out a list. If multiple people request the same item, negotiate an agreement so everyone knows who receives the property.

While it's impossible to stop family disputes over inheritance, there are techniques that minimize relationship damage. Not only can estate planning lessen potential for arguments, it also offers peace of mind knowing affairs are in order.

21pbn

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About the Author

California real estate investor, Simon Volkov, provides information and resources about Making Home Affordable programs, foreclosure alternatives and how to short sale real estate via his website. Simon's comprehensive real estate article library offers up-to-date information to help borrowers make informed choices. Learn more by visiting www.SimonVolkov.com.