If you have any substantial wealth that you will leave behind for your loved ones, then it is a good idea to set up an estate plan. It is true that some people do find estate planning to be depressive, but if you wish to avoid conflicts among family members after your death, then this is something that needs to be done. In this post, we look at nine tips that you should keep in mind during estate planning.
Personal Property Memorandum
If you have any personal property that you wish to give to any specific individual, then make sure to mention it in a personal property memorandum. This document must be written by your own hands and must contain a sign at the end. For example, you may want your personal wine collection to be given to your first daughter’s son because of his constant interest in it. So, make sure to specifically mention it in the memorandum.
Do you wish to leave an asset to a charity? If so, this too needs to be mentioned in the estate documents. Some people just tell their relatives to give a portion of the assets to a charity organization after their death. But this may never happen as the relatives might neglect their wishes and keep the portion of assets to themselves. To avoid such possibilities, remember to mention in the documents which assets should be provided to which charity.
You should also pick an attorney who has vast experience in estate planning, has a good reputation, and is easy to talk to. If the attorney is also tech-savvy and uses software like Practical Planning Systems to speed up their work, then even better. Just be sure to ask them about their fees prior to hiring them.
When the asset is divided between beneficiaries, you also need to consider the shipping costs involved and whether the estate will pay for it or not. For example, you may have antique furniture in your home that you wish to leave to your granddaughter. However, the shipping costs involved may be too much that your granddaughter may decide against transporting it to her home. To avoid such situations, it is recommended that you clearly mention that all shipping costs of assets will be borne by the estate.
Estate planning is done to avoid family conflicts regarding assets. However, this does not mean that no fight will break out between the family members. Some members may not like that they have been assigned fewer assets while others were provided with more. As such, you should state in the estate that the executor has the complete authority to resolve all disputes arising from the division of the assets.
Your estate will likely attract taxes. As such, you should plan your asset division in a way that taxes are automatically taken care of by the estate. This will avoid unpleasant situations in the future. For example, if the estate does not pay the taxes for a piece of land, then the beneficiaries may be burdened with a big tax bill from the state.
Children From Previous Marriage
If you are currently married with children, but already have children from previous marriages, then you should be very careful when deciding the division of assets. Never assume that your current spouse will provide a part of the assets to the children from previous marriage. If you wish to leave something for those children, mention the same in the estate documents.
You can also set up an Advance Health Directive together with other estate documents. Through this document, you can state the procedure that needs to be followed in case you become incapacitated and are unable to communicate with anyone. You can mention the scope and length of treatment that should be given to you under such circumstances together with instructions on how to deal with your body in case of your death.
Talk With Your Family
It is also a good idea to have a talk with your family members regarding how you are going to divide the assets between them. Yes, it can get awkward and even a fight might break down between them. But this gives you a chance to explain to your loved ones why you are dividing the assets the way you are, and the criteria you have used to decide who gets what. And by doing so, you stand a chance to make everyone agree with you, thus avoiding the possibility of family conflicts in the future.