No one likes to think about their own mortality, but making a proper estate plan can help to lessen the grief of loved ones left behind. Alternately, without a written estate plan, surviving family members are often saddled with the responsibility of making estate decisions without a clear understanding of the deceased’s wishes.
The effects of poor estate planning can be far-reaching, but perhaps one of the most insidious effects is the conflict that can occur within families as a result. Many individuals believe that their family is too close to squabble over money or "who gets what", but they miss the point. Even families with the best relationships can experience conflict because of poor estate planning.
To help surviving family members move forward with solidarity after a loss, here are some proven tips for reducing the possibility of family blowouts and arguments.
Talk Openly with Your Family - The biggest problem with leaving your family to finalize your estate matters is that you won’t be around to guide their discussions. Avoid this pitfall by arranging a family meeting to explain your goals as you plan your estate. While your family members may not completely agree with all your wishes, they will at least have a clear understanding about your estate planning strategy. That is the biggest step.
Think About Your Legacy - Do not just consider which family members might want specific bequests, take the time to think about the overall legacy you want to leave behind. If required, plan for how you want to divide your estate assets between your heirs and any of your favorite charities. These are decisions to make now, not later.
Consider Insurance - Life insurance can be a very useful estate planning tool, even for those with large estates. Your estate may not be instantly liquid upon your death, so life insurance can help provide extra cash when it is needed most. The proceeds of an insurance policy can help cover the costs of replacing income for your immediate family, pay immediate expenses that occur as the result of a death, and take care of any income taxes due.
Keep Your Will Up to Date - This should go without saying, but always keep your will updated. The easiest way to cause conflict after your death is to have a vague, out-of-date or unclear will. Be sure to account for beneficiaries who might have died or been born since the last time you updated your will. If you have been through a divorce and have remarried this can also have a huge impact on an estate planning strategy.
Finally, Choose a Suitable Executor - Selecting the right executor to fulfill your wishes completely and accurately can go a long way towards mitigating any possible family squabbles. You want someone with not only a personal connection but also the financial acumen to be effective in their role as executor. You might also want to consider someone who can keep emotions out of the mix.
Speak to a qualified financial advisor if you have questions or concerns about creating a proper estate plan for either yourself or someone else in your family.
Mutual Funds and Segregated Funds provided by the Fund Companies are offered through Worldsource Financial Management Inc., Other Products and Services are offered through Dave Gorman Financial Strategies.