Litigation after the death of a loved one is never easy. It often pits relatives against relatives and can be very stressful. It is not something you want to happen when your loved ones are already dealing with their loss. How can you make sure your loved ones don't fight or become involved in litigation over your estate?
Here are some things you can do to help avoid litigation:
1. Communication. Inform your heirs if you are making a distribution that is "not natural." A "natural" disposition is when you leave your estate to your heirs such as your children and grandchildren. An "unnatural" disposition is where you disinherit your natural heirs and leave your entire estate to someone you have known for 6 months, for example, or a caregiver, or other distant family members or charities. It is of course up to you who you choose to inherit your estate but it will help to avoid discord later if you tell your heirs what you are doing. You can discuss it with them or leave them a letter of explanation. Litigation develops when the individuals who thought they would be receiving an inheritance find out after your death that they were disinherited or will not be receiving an asset or a portion of your estate that they thought they were getting. So if you do want to exclude a child, for example, or make an uneven distribution of your estate among your children, tell them about it or in some manner explain it so it doesn't come as a complete shock.
2. Have properly prepared legal documents. Make sure your estate planning documents are properly prepared. So often, litigation arises because of wills or trusts that were not properly drafted in the first place. If you are concerned about someone contesting your will or trust, you certainly don't want to do it yourself or use a "trust mill" or online service. You want customized properly drafted documents so there is no ambiguity as to your wishes. Also, most estate planning lawyers also do trust administration. Frequently it is the case that surviving family members will call the lawyer that drafted the estate plan, so choosing a trusted lawyer that you can work with during your lifetime may also be someone that can assist your family upon your death.
3. Keep your estate planning documents up to date. If you have neglected to update your trust to add or remove beneficiaries after a death, divorce, or other changed circumstance, or worse yet, neglected to change payable on death designations, you are asking for trouble. An up to date estate plan (which includes a trust, pour-over will, and powers of attorney for management and health care) makes it less likely for uncertainty upon your death. Also necessary as part of the periodic review of your estate plan is to have the beneficiaries updated as necessary on life insurance polices, IRAs, pension plans, etc. The last thing you probably want is your ex-spouse receiving life insurance benefits when you were divorced 10 years ago.
4. Include "no contest" clauses in your estate planning documents. Most wills and trusts have a "no contest" clause. This can discourage disputes over a will or a trust because it provides that someone who contests certain provisions in your estate plan will not be entitled to an inheritance. Depending on where you live, some "no contest" clauses can be easily overcome.
5. Don't forget to provide for your personal property. Dividing up personal property and family heirlooms is another area which, believe it or not, can become a battleground. Family members sometimes hold up the rest of the estate administration over property that has little monetary value but has great sentimental value. Unless you have left specific instructions, your personal property will be divided up among the beneficiaries. But how does you executor or trustee know how to determine an equal distribution of items that have sentimental value? What do you do if both daughers want (and may have been promised) grandmother's ring? If you have personal property and you want it to go to a certain family member or a friend, there are several ways to do it. You can make a specific bequest of an item in your will or trust. This is a preferable way for items of value. You can also execute a personal property memorandum listing each item and who is to receive it. This can be changed or added to at any time before your death. There are even online auction sites that will divide up the personal property among family members if you sign up before your death.
Taking the time to incorporate some of these ideas into your estate planning can avoid disputes over your estate that are not only costly in terms of money but also in terms of family harmony.
For more information on Wills, Trusts, and Estate Planning, check out Carol Ronquillo's blog at: http://www.carolronquillo.com/blog. You can also signup to receive a quarterly newsletter on estate planning.
Carol A. Ronquillo, Attorney at Law, has been an attorney in the San Diego, California area for over 34 years. Once an accomplished litigator, she has now devoted herself exclusively to estate planning for over almost a decade now. Ms. Ronquillo has been very active in the legal community becoming an accomplished speaker and teacher as well as an expert legal practitioner. For more information on Carol A. Ronquillo and her practice, visit http://www.carolronquillo.com.
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