Communicate with Your Family Members About Your Estate Plan
By discussing how you would like your assets to be handled after your death, you can reduce the likelihood that your beneficiaries will be surprised. Effectively making them aware of your intentions will also reduce potential misunderstandings.
Think Carefully About Whom You Would Like to Appoint as Your Executor or Trustee
Some clients may underestimate the responsibility associated with serving as executor of a will or trustee of a testamentary trust, but neither is a light lift. The person or people you appoint will have a fiduciary duty to act in the best interests of the beneficiaries of your estate or trust—a duty that comes with a high standard of care and significant responsibility involved in administering an estate or investing the assets of a trust.
It is important to select someone with decent financial acumen and good communication skills because, as part of the estate settlement, they may be dealing with paying debts and managing beneficiaries with conflicting interests. Some clients appoint their eldest child without giving the role adequate consideration, which can backfire and result in sibling rivalry if another child is not similarly appointed or at least consulted regarding the appointment. Appointing a non-family member or corporate executor/corporate trustee are options that may help to avoid family feuds.
Discuss the Executor/Trustee Roles with the People You Would Like to Appoint for Them
In New York, executors also have a right to get paid for their work through commissions, which are calculated as a percentage of the probate estate’s value after any specific bequests, legacies, or devises. A testator can specify that their executor needs to waive commissions to be eligible to serve, so it is important to discuss with an executor not only whether they are up to the task of administering your estate or managing the assets in a trust but also potentially whether they intend to take commissions for the work. (Here is yet more potential for sibling disputes if one sibling is unexpectedly left out of the opportunity to serve in a role with financial compensation.)
Make Sure Your Estate Planning Documents Are Drafted Clearly
To avoid misunderstanding, ensure that your will and other estate planning documents specify how your assets should be divided between your surviving spouse, biological children, adopted children, and any stepchildren.
Keep Your Estate Planning Documents and Beneficiary Designations Up to Date
Life events like marriage, divorce, and the birth of a child require revisiting your documents because they change your family structure, which can affect how you would like your assets to be distributed after your death. There are myriad examples of the negative consequences that failing to draft adequate estate planning documents or update them can have.
For example, four years of family conflict ensued after the 2018 death of Aretha Franklin. The singer’s family members battled over which of two handwritten documents should be recognized as representing how she wanted to divvy up her estate, which was valued at $18 million. Ultimately, a jury determined that a four-page document signed with a smiley face and discovered in a couch in Franklin’s home was her true will.
Another singer who died without updating his estate plan is Barry White. When White died in 2003, he had been separated from his second wife, Glodean White, for many years, but the couple had not yet divorced. Glodean reportedly inherited everything, and Barry’s long-term girlfriend and children were left with nothing, which led to a legal battle. These dramatic outcomes show what can happen when you do not keep your documents and beneficiary designations current.
Know When to Call In a Mental Health Professional
“Attorneys need to have mental health resources available for referral of clients when the communication within the family reaches a pitch that feels beyond the capacities of the attorney to address,” says Dr. Marsha Levy-Warren, a New York-based clinical psychologist and psychoanalyst. While lawyers may have experience in mediation, family conflict often involves emotionally charged triggers like money and loss. When managing a conflict situation gets beyond an attorney’s abilities, consulting a mental health professional can result in smoother negotiation and a more favorable outcome for all the parties involved.
Although some conflict may be unavoidable, taking some of these steps as you decide how your estate will be distributed will reduce the likelihood of significant strife after your death.
