Will You Make Your Kids Angry After You Die?
During my career of doing estate administration, I found in the earlier years that the beneficiaries were more appreciative of what they received. The children got along and all was well. However, our society has changed and now there are many cases ending up in court to settle matters which were not able to be settled amicably. Family members become estranged from one another sometimes over the most trivial matters.
So, what can you do to keep peace in your family after you go to that great place in the sky? Here are some basic suggestions for people of all ages to consider:
Is your estate planning up to date – or do you even have your planning done? This is a very broad term – estate planning – and covers many areas. Should you die without having completed your estate plan, certain areas will be decided according to law rather than according to your wishes. These include, but are not limited to, who will inherit your assets, who will become the representative of your estate to handle the administration, who will become the guardian of minor children. If you don’t want the law to make these decisions for you, then you need to have estate planning done. Also, the lack of estate planning tends to leave family members feeling like they have a mess to deal with. Financial records could be incomplete or in today’s world be kept only online and not be evident. This leaves a mystery of what assets there are and the value. End of life and postmortem wishes are not known. Just to name a few.
Estate planning includes addressing the issues stated above, but there is more to it. A prior blog discussed having the talk with children to let them know what your wishes are, where to locate documents and information when needed, etc. Keeping too many secrets from your children can present problems. If you have preplanned your funeral and/or purchased a burial plot, even perhaps planned your memorial service, let your children know where to find this information when the time comes. If they find it a couple of weeks after you pass, it does no good for any one. Sharing this kind of information is not easy but it is so helpful.
During your lifetime, there may be a need to have someone act on your behalf to pay bills, handle financial matters, etc. if you are unable to do so. A Durable Power of Attorney is the document which names an agent to act on your behalf if needed. Without a Durable Power of Attorney, your family could experience the inability to gain access to your bank account. Would you want this to happen?
In the event you became unable to make your own medical decisions, a Health Care Directive/Living Will is very important. This will name an agent to make medical decisions on your behalf according to your wishes. It provides medical personnel with a point person with whom to discuss your care and how to proceed. I have seen families with several children and the parents do not have a Health Care Directive. Each of the children can rationalize why they know what mom or dad wanted and should be able to make the decisions. However, without a document naming an agent, there is no point person. This leads to much angst with the family as well as the medical professionals.
You may have indicated to different individuals your wish that a certain asset was to go to them. However, if you don’t write it down and after your passing more than one person wants to claim a particular asset, what happens? Each of these persons has their side of the story as to receiving the asset and feels entitled to it. Once again, angst among the kids. So, what should you do?
A Last Will and Testament will solve the problem if done properly. A Will states who is to receive your assets and who is to be the executor to wrap up your affairs. Generally, a Will addresses the distribution of tangible personal property through a memorandum document which you prepare and place with your Will. However, failure to complete the memorandum is cause for problems. Sticky notes on the back or bottom of items are not valid indicators of beneficiaries of items.
Estate planning also includes making certain that beneficiary designations of life insurance and/or retirement accounts are completed properly. It should never be assumed that if one beneficiary is designated that they will split the asset with other children. There may be tax consequences incurred by the designated beneficiary and it would not be fair to have them burdened with tax when they had to share the money.
An out of date Will can pose many problems. Let’s say that an unmarried aunt/uncle left nephews and nieces a specific dollar amount in cash. When the aunt/uncle dies, their assets were insufficient to make payment of these bequests, let alone have any residual to distribute to the residuary beneficiary. If you have specific bequests in your Will and your financial status changes due to increased expenses, updating your Will to better reflect your current status can save much angst.
Be realistic when thinking about the disposition of your assets. If you have a family member with special needs, consider whether an outright distribution from your estate would compromise any benefits they may be receiving. Would you want the spouse of a child to be able to stake a claim in your child’s inheritance from your estate? Is there a beneficiary that doesn’t handle money very well? These are all matters which should be brought up with the attorney who is assisting with your estate planning so that steps can be taken to protect your intentions.
There are programs on television about hoarders. While you may not be a hoarder, be realistic about what fills your home. Have you held on to items just because you think you may be able to use them in the future – even though you haven’t used them in the 10 or 20 years since acquiring them? The thought of going through the contents of your home can be overwhelming but spending 30 or 60 minutes at a time can help you eliminate your excess. Charities are always happy to receive donations of items that can be reused. Leaving your accumulation of excess items is a monumental task for your family to go through. I’ve cleaned out many houses of clients who passed away and I can tell you that it is not a fun job. I had no emotional ties to the deceased, but when you think of your children going through each and every item, not only is it a time-consuming job, but it is very emotional.
Be proactive. Make doing your estate planning a priority or if you have your planning done, review it. Laws change, people change, change is constantly occurring. Don’t leave things in a state of disarray for your children to put together like a puzzle without having the picture to look at. Your intentions are for peace and cohesiveness within your family; not estrangement.
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