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Planning and disclosure could head off squabbles over inheritance

A poll of 109 estate planning professionals gathered at the 52nd Annual Heckerling Institute on Estate Planning that took place in Florida revealed how family dynamics and disputes can affect estate plans. Although taxes often concern people who want to transfer wealth, 44 percent of the professionals said that family conflicts caused the most problems.

The complexities of modern families that involve multiple ex-spouses, stepchildren or age disparities between spouses sometimes trigger disputes over money. Ideally, people will prepare an estate plan that establishes their wishes concerning the distribution of assets. The terms of a will or trust could create a legal framework that overrides conflicting claims among potential heirs.

People who have to manage a variety of expectations from heirs might reduce disputes by disclosing their estate plans. Disclosure gives benefactors a chance to explain their reasoning to family members. Fair distributions might not be the same as equal distributions, but if heirs learn the reasons behind a benefactor’s decisions, they might come to accept them. The choice to place assets in a trust might upset an heir as well. If that issue comes up, a benefactor could help the person understand the safety created by a trust because it might protect funds from creditors.

A person who wants to develop a strategy for distributing assets to heirs may consult an estate planning attorney. Legal research might provide individual advice based on the person’s potential exposure to taxes and goals like passing on a business or preserving wealth across generations. An attorney may help a person explore the pros and cons of various approaches such as gifting or trusts and then prepare the documents once a person has made final decisions.

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