Inheritance disputes have the potential to take once healthy family relationships and turn them into dust. Estates get lost, siblings turn on each other, and parents wishes for a close family get thrown out the window. Avoid Inheritance disputes through proper estate planning.
How will proper estate planning ward off potential inheritance disputes?
Estate planning lays things out ahead of someone’s death there can be no questions later about their intentions. Estate planning goes beyond a will and covers all aspects of the process, including care while the person is still alive. This preparation stops any potential inheritance disputes before they begin. These are some of the critical areas of estate planning.
Wills and Trusts
The first step in estate planning is establishing the will and trust. Confusing the two is easy.
What Is A Will?
A will is a legal document with four necessary parts. It instructs your descendants on how to divide property and assets. It names your beneficiaries or the people who you want to benefit from your assets. Additionally, a will names your executor. Finally, if you are a parent of minor children, a will appoints their guardian after your death.
It is essential to make a will because if you die without one, you die “intestate.” This word means a judge will decide your beneficiaries, divide your assets, and appoint a guardian for your child.
What Is A Trust?
A trust is a legal relationship that begins while you are still alive. It is made up of three essential parts, the grantor, the trustee, and the beneficiaries. The grantor is the person who creates the trust. The trustee is the person who manages and holds the grantor’s estate for the recipients. This property can include everything from real estate, stocks, bonds, money, automobiles, boats, collections, or any other asset. When you die, the trust passes to a successor trustee who then distributes the assets among the beneficiaries.
Advance Directives and Medical Powers of Attorney
An Advance Directive is also known as a Living Will. This document lays out your wishes regarding medical treatment at the end of your life. For example, it states whether you want to be on life support or not. A Medical Powers of Attorney is also known as a Healthcare Proxy. This person makes medical decisions for you when you cannot.
Long-term Care Options
Long-term care planning addresses what happens to your assets if you live and are in need of long-term health care. It protects your assets for as long as possible and extends your money as long as possible.
There are five different ways to pay for long-term care.
- Long-Term Care Insurance
- VA Benefits
- Private Pay
A good long-term care plan leverages money and defers risk. For example, if someone pays $1,500 a month for long-term care insurance, they would have spent $30,000 in 20 years. If they wind up in a nursing home that costs $5,000 a month, they recoupe all the money spent in just six months.
What are unusual cases of inheritance disputes?
There are some stunning examples of inheritance disputes. The cause is usually lack of verbal or written communication. Avoid cases like these through proper estate planning.
The Burgess Siblings
In this sad case of inheritance dispute, a brother and a sister pitted against another sister. In the original will, the mother divided her assets equally among the three siblings. Then, as her health declined, she moved into the middle sisters home. The two other siblings found out later that the sister was helping herself to her mother’s money, to the tune of £18,000. The sister then had a new will made up, cutting the brother out of the will.
When their mother died, the truth came out. The eldest sister sided with the brother, and they went to court. After years of dispute and legal battles, the assets still sit in a bank, and the siblings all owe more in legal fees than the estate is worth.
Jarndyce v Jarndyce
The Jarndyce v Jarndyce case is one of the most notorious among inheritance dispute cases, even though it is fictional. It is the central plot line in the Charles Dickens book “The Bleak House,” and is synonymous with long, drawn-out legal battles. While the Burgess case was going on, people often called them the modern day Jarndyce v Jarndyce. In the end, the court costs had devoured the entire property.
Proper estate planning saves a lot of heartaches. Plan your estate while you are vital and healthy to meet all your wishes. Moreover, estate planning ensures you are taken care of if your health starts to fail. Even though it is a subject that people don’t like to talk about, it is in the best interests of your children to do so as soon as possible.