A legal dispute over a relative’s estate can be very hard on a family. No one wants their legacy to be a series of nasty arguments among the people they love. That’s why when you are creating your estate plan, one of your main goals should be to minimize the possibility of litigation.
To that end, here are some mistakes and issues that often legal disputes. Keep them in mind as you are starting your plan.
Contingent beneficiaries
When you create your will and/or trust, you name beneficiaries who will receive your assets after you are gone. But what if one or more of your beneficiaries dies before you do?
No one likes to think about this possibility, but it can happen, and does happen in many cases. If one of your beneficiaries dies before you and you have not named a contingent beneficiary, the assets you intended to leave to your beneficiary will likely go back into your estate and must go through the probate process. This can be slow and complicated for your family, and can lead to results that you none of you wanted.
Real estate issues
Many legal disputes in estate law involve mistakes in conveying real estate.
For example, some people try to leave their home to an adult child by simply putting the child’s name on the deed to their home. This gives the child title to the home and can sometimes lead to terrible situations in which a child evicts their parent from their home.
You may have no fear of such a thing happening in your family, but you can create other problems with this kind of maneuver. By handing title in your home over to your child, you may be exposing them to an enormous tax bill.
Choosing the right people
When you create a will, you must choose the person to serve as executor of your estate. It’s important to choose a person who can handle the details and responsibilities of this role. You should also choose someone to take the role if your first choice is unavailable.
Similarly, it’s important to choose the right person to serve as trustee for your trust. This is a role that requires financial skill as well as responsibility. It can also continue long after you are gone.
And if you have minor children, think long and hard about who you want to name as their guardians.
Everyone needs a plan
So far, we have discussed a small handful of topics to think about when creating your plan. There are many more, but the most important thing to remember is the most basic: Make sure you have an estate plan.
Even if you don’t think you have a lot of property to pass on, when you have a well-drafted estate plan, you save your loved ones a lot of trouble and make sure your legacy is one of love, not litigation.