Do you have a plan to deal with your assets and investments when you pass away?
Having your estate planning documents in order is what separates a smooth estate distribution from a legal mess. When you pass, you’d like to think that siblings will be there for each other instead of feuding over your belongings.
I’ve been providing advice for many years and if it’s taught me anything, it’s that a written estate plan is a necessity if you want to keep siblings from fighting over their parents’ assets after they pass on.
Are you ready to avoid the heartache, feuds and relationship breakdowns when your estate planning affairs are not in order? Then keep reading.
Here are 6 things that cause fights between siblings on your passing and how to avoid them.
6 common things that siblings fight over after your death
1. No Will
If you die without a Will or have an invalid Will, you will die “intestate”. This means state/territory legislation will determine the distribution of your assets. The risk is that the allocation may go against your final wishes.
If you’re not around to make that decision, this situation will create chaos and fights between siblings if they can’t agree on how to divide your assets. A Will identifies the assets and specifies who gets what. This will ensure that your loved ones will be looked after the way you intended.
2. No communication with children about the Will
Let’s say you did have a Will in place. But then you decided to give one child more assets because they looked after you when you were seriously ill. This can lead to jealousy from the other siblings because they can feel neglected. It’s not easy to talk about inheritance or death with your children because it’s uncomfortable. But an open discussion with your children about who is getting what will avoid problems arising from a misunderstanding about the reasoning for the uneven distribution.
3. Wrong Executor
An Executor is a person appointed to distribute the assets according to the Will. Often, one of the children is appointed as executor. Tensions can arise between siblings because some feel jealous that they weren’t appointed. It is also possible for the executor to abuse their power for personal interest. In this instance, it’s best to consider appointing a third party as executor who has no personal interest in the estate.
4. No Advance Care Directive
Caring for an ill parent is stressful enough for the children. If you add the fact that you’re unable to make decisions due to incapacity, your loved ones will be forced to make the decisions for you. If they can’t agree, conflicts arise and some have taken each other to court to fight. This results in lost money on legal fees and loss of precious time. It can get worse. If disputes are evident, the State Trustee may assume powers on your behalf. An advance health care directive is a way to let people know your wishes about your healthcare and treatment should you find yourself in a position where you are seriously ill or injured and unable to make decisions. It includes the person who you would like to make decisions for you, your preferred outcomes, and the treatment and care you would like.
5. No Power of Attorney
If you’re sick in the hospital for an extended period, and you’ve got financial affairs to look after, powers of attorney will allow another person to act in your place and make decisions on your behalf if you are no longer able to do so yourself. Often, critical decisions need to be made but are hindered by in-fighting between siblings. To avoid this, appoint someone who will look after your affairs to ensure fights don’t occur.
6. No Testamentary Trust
Assets can be left to specific people through your Will indirectly through a testamentary trust.
This is especially important if you are leaving an inheritance to children under 18. Further, if certain beneficiaries would put assets at risk due to personal and business circumstances, then a testamentary trust may protect that person. It can also be used to restrict access for family members who are not able to responsibly manage their financial situation.
How do you start?
Planning on what will happen to your assets when you pass away is central to providing peace of mind for you and your loved ones.
There are 3 key steps to get your estate plan started:
Step 1: Examine what personal assets you hold. This extends beyond furniture, car and real estate and may include assets held in trusts, superannuation and insurance policies.
Step 2: Determine potential risks. Identify the possibility of illness, mental incapacity, lifestyle needs, and premature death.
Step 3: Plan. This step involves contacting your solicitor and developing a strategy to deal with your assets upon your demise to control who receives and what happens to the assets from your estate after your death.
If you don’t want your loved ones to face a legal mess when you pass on, get your estate planning in order. It may sound like a lot of paperwork but it will avoid tearing families apart.
Getting started is easy. Speak to your financial adviser who can refer you to an estate planning specialist or solicitor and start the conversation today. It ensures personal wishes will be followed upon your death and that someone will be there to make decisions in the event of incapacity, illness, and accommodation and lifestyle needs. When your estate plan is in order, you can rest assured that you have the best chance of having your wishes fulfilled when the time comes. Book a time to chat to the Integra Financial team here about your estate plan.