Avoid Family Feuds
Your estate plan can work technically and it can work practically, but if it doesn’t work emotionally, it may not work at all. In many families, the presence of the parent has kept family relationships on an even keel but once that parent is gone, children can use the estate as a last chance to right what they perceive as past wrongs.
Legal Challenges to Estates
Even if an estate plan is sound, it’s not all that difficult to make a legal challenge. There is only a small cost involved to initially challenge a will. If Mom was old and depressed, and a larger slice of the estate goes to the child living closest to her, a sibling could challenge that there was undue influence over their mother’s wishes. A will challenge that makes it through the courts could cost the challengers and defendants as much as $250,000.
Seeds of Dispute
Family dynamics can be highly complex. The death of a parent can ignite simmering tensions. Be aware of some of the things in estates that are particularly prone to trigger family disputes. These may include:
- Naming one child as executor and/or power of attorney: other siblings can choose to challenge everything the executor and power of attorney does, making this person’s life miserable. Naming a third party may be a better choice.
- Use of trusts to control after death: trusts can often cause more issues than they resolve. It might be less emotionally draining on the surviving family members to give the spendthrift sibling his/her share without any strings attached than hold it back in a trust and have another sibling manage it.
- Emotionally charged property, such as a cottage: sometimes, the safest way is to sell the cottage and let siblings use the proceeds to buy their own.
- Unexpected charitable gifts: charities fight as hard as any living litigant for their promised share of an estate. Make sure other heirs are aware of these bequests.
One of the best gifts you can bequeath to your children is an estate that avoids the potential for family feuds. To do this, give the following points some thought as you plan your estate:
- Think about how your beneficiaries will interpret your wishes.
- If any child is to be treated differently than the others, all children need to hear this news from the parent rather than reading it in the will.
- Disputes usually arise when expectations are not met, so parents need to manage estate expectations when they are alive.
- If something is likely to be contentious, parents are wise to document their rationale or have their request recorded in a video by their lawyer.
- If you anticipate potentially contentious issues arising from your estate plan, be sure to discuss your concerns with your financial or estate planning consultant. Your consultant can help you evaluate your current estate plan and recommend strategies for minimizing the potential for problems.
Government of Canada:
What every older Canadian should know about: Having a will and making funeral plans