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Following the death of a relative, the last thing anyone wants is a fight over the assets of the deceased. Everyone, including those in the court system, want the process to go as smoothly as possible.
With all of these good intentions, how do we still get into bitter disputes over inheritance? How can these disputes be avoided?
1. Goodwill Is Good -- a Good Will Is Better.
The best way to guarantee an inheritance dispute is to die intestate, or without a legal will. Perhaps you trust your heirs to figure it out, or maybe you remember having a conversation about your estate once over a family dinner. However, all trust and amiability within the family can disappear with you. Also, oral wills are almost universally prohibited.
What Happens If You Die Without a Will?
If you die without a will, state laws will determine how your estate is distributed upon your death. And state laws on intestacy can vary depending on where you live, your marital status, and whether you had children. In most cases, if no living relative can be found, all of your assets could go to the state.
How to Create a Valid Will
Not all wills are equal, and creating a will that does exactly what you want can be extremely difficult. The first step is ensuring that your will is valid, and while state law can vary on the matter, generally you need six elements:
Making a will that does exactly what your heirs want, on the other hand, is a different matter.
2. Avoid Probate.
Having a will is better than not having one. But there are ways to avoid the need for a will, if you plan ahead.
Probate is the legal process for transferring a person's property after they die. While a well-drafted will can help probate run smoothly, it can be a lengthy and expensive process. Probate can take anywhere from six months to a year to complete, and normally includes court costs and attorneys fees.
All of this means more time, more costs, and more opportunities for disagreements regarding the inheritance. Distribution of the decedent's assets is the last step in the process.
So how can you avoid the probate process? By finding other ways to pass on your assets. And there are four good ways to do it:
Neither you nor your heirs want your estate going to pay court costs and attorney's fees. You can avoid these expenses by avoiding probate.
3. Create Living Wills and Durable Powers of Attorney
Many inheritance disputes arise out of decisions made late in life. When an elderly person changes or replaces a will, heirs can be skeptical and wonder if the person was of sound mind or possibly manipulated.
This can be especially true in the context of healthcare. But living wills and durable powers of attorney can help to avoid disputes in healthcare and after. A living will provides instructions on how you want to be cared for in an emergency or if you are incapacitated, including whether or not to resuscitate, your desired quality of life, and end of life treatments. A living will can also include treatments you don't wish to receive.
A durable power of attorney is slightly different: it works by designating a person to make decisions for you if you become incapacitated. While a durable power of attorney can cover healthcare decisions, the person you designate can also make financial decisions for you, including everything from paying your bills, taxes, and medical expenses, managing your real estate and investments, and even hiring a lawyer to represent you.
Creating a living will and durable power of attorney while you're young and healthy can avoid arguments about later decisions that have to be made when you're older or more infirm.
Planning for death is never fun and rarely easy, but the right plan can ensure that your family will avoid many inheritance disputes. If you would like legal assistance creating a will, avoiding probate, or planning for late life decisions, you should consult with an experienced estate planning attorney in your area.