If you have more than one child, it’s essential to do everything possible when you’re developing your estate plan to prevent situations where your kids may feel pitted against one another or believe that they’ve been treated unfairly compared to their sibling(s). Even siblings who have good relationships can see those relationships sour when there are considerable assets on the line.
One way to prevent problems is not to make one of your children the executor of your estate or the trustee of any of your trusts. Even if one child is older and/or more suited to the task than the others, you’re putting him or her in a position of authority when it comes to disbursing assets. That can cause considerable family conflict.
If you don’t have another trusted family member or friend to put in that position, you may want to turn to a corporate trustee from a large trust company or financial institution. As one trust attorney cautions, “Don’t use a small town bank.”
There is some expense involved with a corporate trustee. However, that person is removed from the family dynamics and has considerable experience managing estates.
Another way to avoid trouble is not to combine trusts. If you want to leave funds for your children in a trust, have a separate trust for each child. A combined trust invites in-fighting. Separate trusts help siblings maintain some privacy over their financial situation.
Some estate planning advisors recommend that in addition to having a traditional will that deals with financial matters, parents also write an ethical will. This is a way to share your values, lessons learned and hopes for your family. This may help bring your children closer together after you’re gone and help prevent financial squabbles.
It’s wise to give your children some idea of what’s in your estate plan so that there are no big surprises. If you are leaving more to one child than another — perhaps because that child has helped take care of you as you’ve gotten older or maybe because he or she needs some extra help that the others don’t — it’s a good idea to explain that ahead of time. These conversations may not be pleasant, but they can prevent disputes among your loved ones when you’re gone. Your Arizona estate planning attorney can provide guidance on how to address uncomfortable issues with your kids.
Source: The New York Times, “Here’s How to Maintain Peace Among Your Heirs,” Paul Sullivan, March 22, 2018