While an inheritance can be a very special gift, it can also be the cause of serious family conflict, resulting in rifts between family members and destroying an individual’s peace of mind or financial security. Issues such as, for example, misplaced beliefs and expectations around who will inherit (and what they will inherit) can all cause problems.
Having an Up-To-Date Will in Place
The first step is for an individual to clearly set out their wishes in a valid, up-to-date will. As part of the will writing process, it’s a good idea to also keep an updated list of one’s assets that includes property, bank accounts, savings, investments and pensions. These documents need to be regularly updated, especially when a major life change occurs, such as the marriage of a child.
The Importance of Clear Communication
One of the most effective ways to avoid family conflict is for an individual to clearly communicate their wishes to their family members ahead of time so that expectations are managed and there are no surprises when the will is read in the future. Honest conversations can help family members better understand the reasons behind the individual’s decisions in this regard and avoid arguments. If this feels particularly difficult, it may be helpful to have a professional present during this conversation, who will also be happy to explain any technical terms.
Creating a Trust
For some, putting a trust in place could be an option to explore to help avoid inheritance conflicts. Trusts allow an individual to exercise a level of control regarding when and how their assets are passed on to family members, while a discretionary trust facilitates the giving of guidance about how the trustees should use the assets they have been bequeathed.
Giving Lifetime Gifts
Those with expertise in this field, such as Edgar Paltzer, know that another potential means of ensuring (or minimising) family disputes once an individual has passed away is to think about giving gifts to loved ones during this individual’s lifetime.
As well as possibly preventing future arguments about the division of an estate, this approach allows the gift giver to enjoy seeing the benefits and happiness their gifts deliver. However, it is very important for an individual not to underestimate their own financial needs as part of deciding whether to make a lifetime gift to a loved one.
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