Want to find out how much your family members really love each other? Just wait until a will is read. While family squabbles over wills and trusts are legendary, you can prevent them with careful estate planning.
To stop estate squabbles in the first place, don't write a will guaranteed to cause tension, says Glenn Kautt, CFP and president of The Monitor Group, a financial and estate planning firm in Fairfax, Va. "When we see a potential problem, we ask our clients if they're aware that the plan will probably cause squabbles and suggest ways to reduce potential tensions."
Suppose you designate your older, more responsible adult child to manage estate distributions for a younger adult sibling. "That's almost guaranteed to cause resentment," Kautt says.
Remarriages can also cause problems. Suppose an older father marries a much younger woman. If he wants her to receive all estate income until she dies, his children could wait until their 60s for their inheritance.
On the other hand, giving too much money to young adult benefactors can prove tragic. Financial planners suggest that you distribute portions of your estate every few years until the benefactors are more mature.
If you have children who are minors, you may want to designate a loving, caring guardian for the children, then select a separate person in a different home to manage the money. "Not only does it prevent fiscal abuse," Kautt explains, "but it also ensures that two people are considering the child's needs."
Kautt also recommends that you work with a certified financial planner (CFP) with plenty of estate-planning experience to draw up a plan; then get an experienced estate attorney to write the documents. "A good attorney can write them loosely enough to allow some discretion in interpretation. If you don't want any discretion, the lawyer can write it in tight, legal language."
Finally, Kautt suggests you appoint a family member and a financial adviser as co-trustees of the estate to avoid problems. "In our experience, corporate trustees are inefficient and inattentive, so look for a CFP or CPA."
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Have a question? Ask ThirdAge's money expert Jeff Fleming.
