How Transparency in Estate Planning Prevents Family Conflict

Estate planning is more than just drafting legal documents—it’s about preparing your loved ones for the future. As Warren Buffett explained in a letter to Berkshire Hathaway shareholders, as The Wall Street Journal shared, having open discussions with your family about your will is one of the most effective ways to avoid confusion and conflict after your passing. Despite its difficulty, transparency in estate planning fosters understanding, accountability and alignment with your values and intentions.

Why Transparency Matters in Estate Planning

Family conflict often arises from misunderstandings about estate plans. Buffett’s advice to share the terms of your will with your adult children before signing it underscores the importance of clear communication. Estate planning attorneys echo this sentiment, highlighting several benefits:

Prevent Misunderstandings: Explaining your decisions reduces the likelihood of disputes among heirs.
Clarify Responsibilities: Discussing roles, such as trustees or healthcare proxies, ensures that everyone understands their duties.
Align Expectations: Transparency helps beneficiaries prepare for their roles and responsibilities, minimizing surprises during an already emotional time.

The alternative—keeping plans under wraps—can leave loved ones unprepared, as seen in the story of Ebonee Moore, who didn’t learn about her inheritance until after her father’s passing. This delay hindered her ability to plan wisely, underscoring the value of proactive conversations.

Strategies for Discussing Estate Planning with Family Members

While the conversation may feel uncomfortable, families must address estate planning openly. Drawing insights from The Wall Street Journal and estate planning experts, here are actionable tips for meaningful discussions:

1. Choose the Right Time

Avoid initiating these conversations during stressful periods or family gatherings where emotions run high. You should instead opt for a calm setting, like a private meeting or a dedicated family event.

2. Start Small

As Warren Buffett did with his children, break the conversation into manageable pieces. Discuss overarching goals first, then dive into specifics over time.

3. Involve Professionals

Consider including your estate planning attorney in family meetings to explain complex terms, answer questions and provide reassurance about legal safeguards.

4. Address Common Concerns

Reassure your loved ones that estate planning isn’t just about financial matters—ensuring that your values, legacy and healthcare preferences are honored.

Key Elements of an Effective Estate Plan

An estate planning attorney can guide you in crafting a plan that secures your legacy, while fostering family unity. Critical components include:

Wills and Trusts: These documents outline how assets will be distributed, reducing ambiguity and potential disputes.
Powers of Attorney: Appoint someone to manage your financial and medical decisions if you become incapacitated.
Healthcare Directives: Specify your preferences for medical care to ease decision-making during emergencies.
Beneficiary Designations: Regularly update these to reflect current relationships and intentions.

Overcoming Emotional Barriers

Many families avoid estate planning discussions due to the emotional weight of topics like death and finances. However, avoiding these conversations can lead to greater challenges later. Reframing the discussion as a way to strengthen family bonds and create peace of mind can help overcome hesitations.

Estate planning is an opportunity to share stories, express values and build a legacy of unity and understanding. Writing a letter to beneficiaries, as some estate planners suggest, lets you articulate your values and the reasoning behind your decisions in a heartfelt, personal way.

How an Estate Planning Attorney Can Help

Navigating the complexities of estate planning requires expertise and compassion. An experienced estate planning attorney can provide the legal framework to secure your assets, while helping you facilitate meaningful family conversations.

By working with an estate planning attorney, you can:

Ensure that your wishes are legally documented and enforceable.
Identify the best strategies for minimizing taxes and maximizing your legacy.
Create a comprehensive plan that protects your loved ones in unforeseen circumstances.

Estate planning is more than preparing for the inevitable; it’s about taking control of your future and ensuring that your family is cared for in alignment with your values. Don’t leave your legacy to chance—schedule a consultation with our estate planning attorney today to create a plan that protects your loved ones and fosters peace of mind.

Key Takeaways:

Transparency Prevents Conflict: Openly discussing your estate plan with family members minimizes misunderstandings and strengthens bonds.
Key Documents Are Essential: A comprehensive plan includes wills, trusts, powers of attorney and healthcare directives, ensuring that your wishes are honored.
Professionals Provide Guidance: Involving an estate planning attorney facilitates clear communication, resolves questions and ensures that your legal documents are up-to-date and enforceable.
Legacy Conversations Matter: Sharing your intentions fosters understanding and prepares heirs for their roles, reducing emotional and financial stress during difficult times.

References: The Wall Street Journal (Nov. 29, 2024) “Warren Buffett Talks to His Kids About His Will. You Should Too.” and J.P. Morgan Wealth Management (April 22, 2024) “How to talk to loved ones about estate planning”

What Happens When Executors Keep Beneficiaries in the Dark?

A couple who never had children created a will, leaving their six nieces and nephews equal shares of their estate upon their deaths. When the uncle died, the aunt remarried years later but never changed the will, except for giving her second husband a life tenancy in the family home. A recent article from Market Watch asks if what happened next is right: “My late aunt gave her husband a life tenancy in her home—but her attorney won’t even let us see the will. Is this a bad sign?”

The problems began when the aunt’s attorney told the nieces and nephews that they were responsible for the taxes and property insurance while the life tenant lived in the home. The nieces and nephews had never seen a copy of the will, so they are unsure of their responsibilities as remaindermen. Nothing in the estate needed to go through probate, so the aunt’s will was not available to beneficiaries through the county court.

This case illustrates several important estate planning points. First, an executor of a will (or an administrator of an estate) is required to keep beneficiaries “reasonably informed” of the will’s contents after probate. It seems reasonable for the nieces and nephews to be able to see the will.

In most cases, the person given the life tenancy is responsible for paying taxes and property insurance and for the general upkeep of the residence. Any other arrangement is unusual, so the nieces and nephews are right to want to see the will.

The life tenant has rights, including the ability to rent out the property. However, they can’t do anything to decrease the house’s value. It’s important to know that elderly people may be unable to apply for Medicaid because they live in the house this way.

If it has been months since the person died and there hasn’t been any communication from the executor, a few different scenarios are possible. It may be that the executor doesn’t know they are required to keep beneficiaries informed. However, it’s also possible that the executor is engaging in illegal behavior.

In most states, the executor is responsible for providing beneficiaries with a complete inventory and appraisal of all the estate’s assets. Depending on the state, probating an estate may take more than six months, and creditors have a certain number of months to file a claim.

Suppose the beneficiaries wish to replace the executor. In that case, they can do so by speaking with an estate planning attorney and being prepared to go to court and prove the executor is either self-dealing, incompetent or has a conflict of interest.

However, once the will is probated, it will become part of the public record and must be filed in probate court. Depending on the jurisdiction, the court will give the beneficiaries the right to access the will.

The best option for the nieces and nephews is to consult an estate planning attorney to explore their options. If they live in a different state, a local estate planning attorney can recommend someone in their aunt’s jurisdiction to help.

Reference: Market Watch (April 28, 2024) “My late aunt gave her husband a life tenancy in her home—but her attorney won’t even let us see the will. Is this a bad sign?”

Estate Planning Checklist for 2024: A Comprehensive Guide

Estate planning is more than writing a will; it’s a plan to manage and distribute assets to your dependents. It documents your healthcare preferences, so a loved one decides on medical care according to your wishes. The National Council on Aging (NCOA) Adviser’s article, “Estate Planning Guide and Checklist for 2024,” offers a comprehensive overview of what to consider when planning your estate. This blog post distills the key points from the article and provides an actionable checklist for 2024.

Understanding Estate Planning

Estate planning organizes your affairs to fulfill your wishes after you pass away. It encompasses decisions about money, property, medical care and dependent care. The process includes creating essential documents like wills, trusts, powers of attorney and living wills. Estate planning provides peace of mind that your wishes are known and respected, benefiting your loved ones.

Key Documents in Estate Planning

Wills: A legal document that outlines how to distribute assets after your death.
Trusts: Contracts that allow a third party, or trustee, to hold property and other assets on behalf of a beneficiary.
Powers of Attorney: Legal documents that grant someone else the authority to make decisions on your behalf, in general or specific situations.
Living Wills: Documents that state your wishes regarding medical treatment when you cannot communicate your choices.

Key Takeaways

Common Estate Planning Documents: Wills, trusts, powers of attorney and living wills are fundamental to estate plans.
Everyone Needs a Will: Regardless of the size of your estate, a will is crucial to fulfill your wishes.
Update Your Estate Plan Regularly: Significant life events necessitate updating your estate plan to reflect your current wishes and circumstances.

Conclusion

Consider estate planning to be a critical process to protect your assets, provide for beneficiaries and have peace of mind for the future. Follow the NCOA Adviser’s comprehensive checklist to create your personalized estate plan.

Reference: NCOA Adviser (Aug 21, 2023): Estate Planning Guide and Checklist for 2024.

Do I Need a Pour-Over Will?

A living trust, also known as a revocable trust, is used in estate planning to transfer ownership of assets in trusts and accomplishes several things. It takes assets out of your probate estate, while permitting you to continue to control the assets. You can be the trustee while living and of sound mind, as explained in the article “What Is A Pour Over Will?” from Forbes. The trust names a backup or successor trustee who manages the trust assets if you become incapacitated or die. The living trust includes the names of your beneficiaries, which may be individuals or charitable organizations.

When you die, assets held in the living trust are transferred using the trust administration process. Assets held (owned) outside the trust must be addressed differently. This usually means going through probate.

If you have no will, your state’s intestacy laws will apply. These laws would distribute your assets to family members based on their relationship to you—kinship. This may not be what you wanted, especially if a family member is estranged from you. However, it won’t matter, and other family members will have to live with the court’s decision.

However, you can use a pour-over will to “pour over” any assets not in the trust at the time of your death into the trust after your passing. This ensures that the assets will be transferred through the trust administration as well.

When the living trust is established, assets must be retitled so the trust becomes the legal owner. But you might not do this with everything you own, or you may acquire assets after the trust is created and die before you can transfer them. You might simply forget some assets.

As you create a trust for the specific reason to facilitate effective management and transfer of property through the trust administration process, it makes sense to have all your property moved into that trust upon your passing.

An experienced estate planning attorney can help create the living trust and coordinate it with your will and instructions for all assets not otherwise accounted for to pass into the trust upon your death. You’ll need to work with an estate planning attorney to be sure the trust, will and other estate planning documents comply with your state’s laws.

An estate planning attorney can help you understand other options for transferring assets and provision for loved ones. The pour-over will is one of many estate planning tools available to protect your loved ones.

Reference: Forbes (Jan. 29, 2024) “What Is A Pour Over Will?”

What Is Probate Court?

Probate court is a part of the court system that oversees the execution of wills, as well as the handling of estates, conservatorships and guardianships. This court also is responsible for the commitment of a person with psychiatric disabilities to institutions designed to help them.

Investopedia’s recent article entitled “What Is Probate Court?” also explains that the probate court makes sure all debts owed are paid and that assets are distributed properly. The court oversees and usually must approve the actions of the executor appointed to handle these matters. If a will is contested, the probate court is responsible for ruling on the authenticity of the document and the cognitive stability of the person who signed it. If no will exists, the court also decides who receives the decedent’s assets, based on the laws of the state.

Each state has rules for probate and probate courts. Some states use the term “surrogate’s court”, “orphan’s court”, or “chancery court.”

Probate is usually required for property titled only in the name of the person who passes away. For example, this might include a family home that was owned jointly by a married couple after the surviving spouse dies. However, there are assets that don’t require probate.

Here are some of the assets that don’t need to be probated:

IRA or 401(k) retirement accounts with designated beneficiaries
Life insurance policies with designated beneficiaries
Pension plan distributions
Living trust assets
Payable-on-death (POD) bank account funds
Transfer-on-death (TOD) assets
Wages, salary, or commissions owed to the deceased (up to allowable limit)
Vehicles intended for immediate family (under state law); and
Household goods and other items intended for immediate family (under state law).

Investopedia (Sep. 21, 2022) “What Is Probate Court?”

What Is an Estate Planning Checkup?

The start of the year is the time to review and revisit your estate plan. Just like going to the doctor and dentist for regular exams, it’s basic self-care. A recent article from Kiplinger, “Need an Estate Planning Checkup? Now is the Perfect Time,” advises having an annual checkup with your estate planning attorney before anything goes wrong.

Estate planning is about people. It ensures that loved ones will be protected when we are no longer here. It names someone we trust to administer our estate and follow our wishes. It also ensures that no one is left out or no one is wrongfully included.

After the holiday season of family gatherings is a good time to review the family situation. Children have grown into adulthood. Perhaps they’ve married and had children. What we planned to leave for them as minors may be different now. If your family suffered a loss last year, it may be time to reallocate funds or change beneficiaries.

This is the time to evaluate who you have named as an executor or entrusted with powers of attorney. They may have had their own health issues, suffered memory loss, or undergone their own life changes. These should also be reviewed when creating a new will or trust.

Property values have probably changed over the years. Real estate acquired decades ago may have appreciated far more than anticipated. If the intent is to leave equal shares of assets to beneficiaries, the new value of the property needs to be considered.

Depending on your assets, you may need to engage an expert to provide current valuations for real property, artwork and any other high-value assets. If you expect to see significant changes in the coming year, from selling property or making other adjustments, don’t wait until next year to order a new valuation. The more current your numbers, the better your estate plan.

Tax laws have changed a great deal in recent years. An experienced estate planning attorney will allow you to maximize the estate that you leave. Estate tax and gift taxes have been adjusted for inflation, so you may be able to leave larger gifts to children and grandchildren.

Your estate plan checkup should include a review of recent tax law changes, and a look at the legal environment for the coming year. Discuss how aggressive you want to be with your estate planning. The same goes for life changes which may have legal consequences. All of this needs to be discussed in a candid manner with your estate planning attorney.

You may leave your meeting with a to-do list, or you may find your estate plan still works. Either way, you’ll feel better after your estate plan checkup.

Reference: Kiplinger (Jan. 30, 2023) “Need an Estate Planning Checkup? Now is the Perfect Time”

Who Inherits TV Broadcaster Barbara Walters’ Estate?

Vim Buzz’s recent article entitled titled “Who Will Inherit Barbara Walters’ Estate?” says American broadcast journalist and television personality Barbara Walters also rose to fame and received praise for speaking with people like Hugo Chavez, Fidel Castro, Anwar Sadat, Menachem Begin, Katharine Hepburn, Sean Connery, Monica Lewinsky and Vladimir Putin.

She hosted a number of television shows, including Today, the ABC Evening News, 20/20 and The View.

Walters was well known for her interviewing skills and popularity with viewers.

Her “coming out of retirement” for a special 20/20 interview with Peter Rodger, the father of the murderer of the 2014 Isla Vista shootings, Elliot Rodger, was announced on June 10, 2014.

She spoke in-depth with presidents and their wives, like Richard and Pat Nixon and Barack and Michelle Obama. In fact, she spoke with every sitting president and first lady of the United States during her tenure.

She also spoke with Joe Biden and Donald Trump, but not when they were president.

The newscaster’s estate will be inherited by her family. Chief among her assets was a Florida retreat she purchased in 2014. That was the same year she announced her retirement.

However, the property was placed on the market shortly after her dementia diagnosis took a turn for the worse.

She purchased the three-bedroom, four-bath waterfront condo in Naples for $3.4 million.

Just two years later, in April 2016, she transferred the unit to her daughter, Jaqueline Dena Guber.

The 54-year-old Guber subsequently listed the home three months later for $6.78 million. The home spent time on and off the market until September 2018, when it sold for $5.35 million.

The complex is called Moraya Bay. This luxury building has a concierge service, a private beach club, a large state-of-the-art fitness center and full security.

However, in New York City, Walters had lived in the same Upper East Side apartment overlooking Central Park since 1989.

An ABC program titled “Our Barbara” aired on January 1, 2023, and a 20/20 senior producer remarked, “For a lot of years, we maintained a close eye on Barbara.

Her final public appearance was in 2016, and her final on-air interview was with Donald Trump for ABC News in December 2015.

Reference: Vim Buzz (Jan. 3, 2022) “Who Will Inherit Barbara Walters’ Estate?”

What You Need to Know About Inheritance

Receiving an inheritance is a mixed blessing. It usually comes after a loved one has passed, while you are grieving and trying to figure out how to navigate finances. If you have received or anticipate receiving an inheritance, a recent article titled “Getting an Inheritance? Here are 4 Things to Consider” from Kiplinger, has some helpful information.

It takes time to settle an estate and distribute assets. When a decedent’s affairs weren’t prepared properly in advance, it takes even longer. A recent Gallup poll found less than half of all Americans have a will.

The probate process can be avoided if assets are held in trust. However, even trust distributions may have time-consuming complexities. It can take several months to a year or more to settle an estate.

Being aware of this will help manage heirs’ expectations. Plans for a big purchase should never be keyed to an inheritance, until after the assets are received.

The executor, the person named to administer the estate, must notify beneficiaries and interested parties, pay outstanding bills, close accounts, make an inventory of assets and discern how many of the assets must pass through probate.

They also have to file tax returns with the IRS for the estate and for the decedent’s last year of life. Only after all of this is completed can assets be distributed.

Getting an inheritance often leads to spending the money, not always wisely. Factors such as where the money came from and its intended use influence how it’s spent. However, every dollar inherited should be valued as much as every dollar you earn. Many people treat their inheritances like “fun money” and spend it without careful consideration. Consider using it to bolster your emergency fund, pay off high-interest debt and put some towards long-term savings goals. If there’s still money left over after you’ve covered the basics, then it may be time to spend it on a family trip or support a cause you believe in.

Seek professional advice. Inheritances often come with complications. For instance, there are times when an heir may have a step-up-in-basis provision for taxes. This allows heirs to have the valuation of their inheritance property be equal to its fair market value at the date of death, instead of the lower price at which it was first purchased. This helps minimize capital gains taxes on inherited assets that have appreciated over time. An estate planning attorney will be able to confirm whether this potential benefit applies to you, and what you’ll need to do to navigate any tax issues.

Take time to review your own estate plan. As an heir, or as an executor, you’re likely to be learning a lot about the estate planning process. This should motivate you to address your own estate planning and make it as easy as possible for your own heirs.

This includes keeping clear records of all accounts, along with creating any necessary estate planning documents, including wills, trusts, powers of attorney and advance health care directives. Keeping documents in a place accessible to those administering your estate will help your heirs, as will talking with your family while you are living about your finances, your estate plan and your wishes. The best inheritance of all is one that results from proper planning with an experienced estate planning attorney.

Reference: Kiplinger (Jan. 3, 2023) “Getting an Inheritance? Here are 4 Things to Consider”

What Is Needed in Estate Plan Besides a Will?

Having a will is especially important if you have young children, says FedWeek’s recent article entitled “Estate Planning Doesn’t Stop with Making a Will.” In your will, you can nominate guardians, who would raise your children in the event neither you nor your spouse is able to do so.

When designating a guardian, try to be practical.

Remember, your closest relatives—like your brother and his wife—may not necessarily be the best choice.

And keep in mind that you’re acting in the best interests of your children.

Be sure to obtain the consent of your guardians before nominating them in your will.

Also make sure there’s sufficient life insurance in place, so the guardians can comfortably afford to raise your children.

Your estate planning isn’t complete at this point. Here are some of the other components to consider:

Placing assets in trust will help your heirs avoid the hassle and expense of probate.
Power of Attorney. This lets a person you name act on your behalf. A “durable” power will remain in effect, even if you become incompetent.
Life insurance, retirement accounts and payable-on-death bank accounts will pass to the people you designate on beneficiary forms and won’t pass through probate.
Health care proxy. This authorizes a designated agent to make medical decisions for you, if you can’t make them yourself.
Living will. This document says whether you want life-sustaining efforts at life’s end.

Be sure to review all of these documents every few years to make certain they’re up to date and reflect your current wishes.

Reference: FedWeek (Dec. 28, 2022) “Estate Planning Doesn’t Stop with Making a Will”

Is Estate Planning and Writing Will the Same Thing?

An estate plan is a broader plan for your assets that may apply during your life as well as after your death. A will states where your assets will pass after you die, who will be the guardian of your minor children and other directions. A will is often part of an estate plan, but an estate plan covers much more.

Yahoo’s recent article entitled “How Is Estate Planning Different From Will Planning?” says that if you’re thinking about writing your will or creating an estate plan, it can be a good idea to speak with an experienced estate planning attorney.

A will is a legal document that describes the way you want your assets transferred after your death. It can also state your wishes when it comes to how your minor children will be cared after your death. Wills also nominate an executor who’s in charge of carrying out the actions in your will.

Without a will, your heirs may spend significant time, money and energy trying to determine how to divide up your assets through the probate court. When you die intestate, the succession laws where you reside determine how your property is divided.

Estate planning is much broader and more complex than writing a will. A will is a single tool, and an estate plan involves multiple tools, such as powers of attorney, advance directives and trusts.

Estate planning may include thinking through topics even beyond legal documents, like deciding who has the power to make healthcare decisions on your behalf while you’re alive, in addition to deciding how your assets will be distributed after your death.

Therefore, wills are part of an estate plan. However, an estate plan is more than just a will.

A will is just a first step when it comes to creating an estate plan. To leave your family in the best position after your death, create a comprehensive estate plan, so your assets can end up where you want them.

Reference: Yahoo (Oct. 20, 2022) “How Is Estate Planning Different From Will Planning?”

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