You’re busy trying to soak up all that life has to offer. You want to spend quality time with your family and friends. You want to travel the world. The last thing you probably want to be thinking about is what’s going to happen once you’re gone. Understand that making tough estate planning decisions now can save your loved ones a lot of stress later. Unfortunately, estate distributions can become heated and conflict-laden quickly. Planning for how you want things to be handled is one of the most important financial tasks you can accomplish.
To get your estate ducks in a row, you first need to set the groundwork. In Part 1 of this two-part series, we’re focused on those immediate to-do’s to get you on the right track:
Create a personal property distribution list:
Go through your personal possessions and create a list of cherished items. Then choose who you’d like to inherit each one. Write it down! The distribution of personal property can be a big source of family member strife in the future. Get this task taken care of now.
Consider a prenup or postnup:
A prenuptial agreement (i.e. signed before you’re married) or a post-nuptial agreement (i.e. signed after you’re married) will minimize conflict at death by clearly stating the relative entitlements of spouses and other beneficiaries. Having one of these agreements in place can go a long way, particularly if you’ve been divorced and remarried. It will spell out how you’d like your assets distributed to children not of the current marriage, for instance.
Pre-arrange funeral details:
Go ahead and decide on any funeral arrangements and the form of internment. Again, write it down! Pre-planned and detailed written funeral instructions keep your loved ones from having to make those choices later on your behalf. For example, re-married widows and widowers should decide in advance who is to be buried with whom, so that your family isn’t forced to make that decision.
Appoint a committee:
Two heads are often better than one, and managing the distribution of a large, complex estate is no different. Splitting up the workload can be a big help, particularly if numerous beneficiaries are involved. A couple issues frequently arise in the estate distribution process when there’s only one executor. The sole executor can feel burnout and resentment for having to do all the work. On the flip side, non-executor beneficiaries can feel like they’re not being responded to in a timely manner if the sole executor is overburdened. Misunderstandings can quickly escalate from there.
Decide how you’ll treat your children:
How you choose to distribute your estate is completely up to you. If you decide to leave your assets to your children, any perceived unequal allocation may re-activate old sibling rivalries and cause hurt feelings. Our advice is to make those choices now. Talk with your kids about what you’ve decided to do ahead of time. Being upfront and open with your children will hopefully ensure your family remains amicable after you’re gone. Even though it may be an uncomfortable conversation, keeping your choices a secret will only cause family feuding to worsen once the estate is being distributed.
In Part 2 of this series, we’ll dive into estate plan maintenance. In the meantime, if we can be of any help in getting this process started, don’t hesitate to reach out.