Even the most amicable sibling relationships can quickly turn sour when parents pass away. This is especially the case when it comes to sizeable estates and family businesses.
What are the common reasons for inheritance disputes? How can parents prevent them from tearing their kids apart?
Behind the scenes of inheritance drama
According to Ameriprise Financial, feuds between adult children regarding their parents’ estates occur for a variety of reasons. Here are some of the most common.
Differing expectations – Sons and daughters can overestimate the size of the estate and the amount they will be inheriting. Some adult children count on inheritance to fund their retirement and disputes can arise about who is in greater need. They also may have expected to inherit the family business or property, which doesn’t always end up being the case.
Family tension – Rifts in familial relationships can happen during a parent’s life and long after their death. For example, family tensions are known to arise when parents with adult stepchildren remarry. The kids may not feel close to their parent’s new spouse and not agree with the final distributions and per stirpes laws.
Sentimental possessions – Parents can neglect to include family heirlooms or other items with sentimental value in their estate plans. Adult children can argue over a broken pocket watch or their late grandmother’s wedding ring more often than they do about items of significant value.
Take action to safeguard from squabbles
One of the most effective ways to prevent family disputes is through the execution of a will, trust and business succession plan. Within these legal documents, you can specify distributions according to your wishes wish can lessen the chances that your estate will be contested. Within your plan, you can include a letter to be read about your passing that explains the rationale behind your decisions. When your wishes are put down on paper, your family won’t have to guess and argue about what your wishes were.
However, creating an estate plan is only half of the battle for preventing squabbles. It is imperative that you update your plan often to stay up-to-date with new tax laws and significant life events. After all, it may not be your wish to leave your estate to the ex-spouse who you originally executed the plan with.
Don’t leave a legacy of uncertainty. It may be wise to speak with your kids ahead of time to ensure that everybody is on the same page before and after your passing to prevent future arguments.