Estate Plan Gone Bad
Some people have taken the time to do some estate planning only to have it blow up in their face after they have died. The chance of this happening grows substantially in correlation with the number of years since you last updated your will and or trusts. As you grow older your resources can change dramatically, along with your health and the situation that your benefactors (children) find themselves in when you die. What could go wrong?
Q. What can happen when your estate plan calls for leaving your house to more than one child?
Obviously, a home cannot be divided easily like cash or stock that is sold and turned into cash. Sure, a home can be sold, but what if one or more than one of the children want to buy the home they grew up in? A home is much more than a house to some adults, especially when their parents died in the home they grew up in. It’s not uncommon to want to buy it back for themselves. In many cases it’s the perfect way for older adult children to downsize into a home they are comfortable in with surroundings they have fond memories of.
This can be a recipe for disaster if disagreements occur. Emotions run especially high when a parent dies. Many children want desperately to hold on to all the memories they can of their parent. Unfortunately, the emotions sometimes get the better of the kids and lifelong bitterness is sometimes the outcome of disputes over property or money as a result of less than ideal planning or communication.
The solution is to have an “adult” conversation well in advance. The Executor of the will and the trustee of any trusts should be the first to be “in the know”. The Executor’s duties are somewhat daunting and include not just taking an inventory of all the deceased assets and liabilities, but also making sure the deceased’s intentions are carried out. Some significant potential problems can be minimized if the intentions (which can be misinterpreted) are clearly written out and communicated with the executor ahead of time. For example, you could decide which child has the first right to buy your home from the estate using their share of the inheritance. Ideally, if an adult child is named the executor, the same conversation/explanation would be had with the other children so that they are not surprised by what their sibling/executor tells them at the reading of the will.
The more specific and detailed the instructions with the will the better or at least spell out how those decisions are to be made. I’ve heard of people having HUGE blow ups over seemingly trivial things such as who get’s the grandfather clock, what songs should be played at the Mass, where the luncheon after the funeral should be held, etc…
The last thing a parent wants is for a family feud to occur due to their lack of planning or communicating about their legacy plans. If you haven’t yet created your estate plan or if there is dust piling up on your documents, it may be time you revisited this important area of your planning.