Here’s a good reason to do some estate planning–to avoid fights and hard feelings between your heirs. The Washington Post recently had an advice column that addressed the issue of two siblings fighting over the family home. One lived in it and wanted to keep it; the other wanted his money. It seemed the two were headed toward a partition action–a forced sale of the family home meant to solve the disagreement and separate the two owners’ financial interests. Unfortunately, such a sale solves the money dilemma, but it’s likely to leave the siblings on very bad terms.
Estate proceedings can bring out hard feelings among heirs. With some pre-planning though, you can help avoid some of the struggles. Passing on farmland, a business, or a house? Consider whether your heirs will have enough cash to buy out those who no longer want to be involved. If not, life insurance can help you make sure there is enough cash available to prevent credit problems. Or you could divide your assets to avoid leaving large assets jointly. Do you have a paid-off house, farmland, and an art collection? Maybe it would work to divide the value of those items evenly between your children to avoid anyone having to share. Perhaps you’ll need to consider whether some of your heirs have stronger ties to the house, the farm, etc and think about leaving alternate inheritances to others.
An attorney can help you value your assets and devise a “fair” plan that works for your situation. And truly, because every family is different, every situation will be different.