Whether a family resembles "Ozzie and Harriet," "The Brady Bunch" or the current "Modern Family" sitcom, most people look forward to getting together with their extended family over the holidays. Nevertheless, it is probably not coincidental that the holiday season often causes people to re-consider their estate plans. Guardians and executors are frequently changed at this time of year. The age for distribution for children or grandchildren might be re-evaluated. The new year may bring a fresh approach to the choices made in prior years.
Although conflicts can arise among members of a more traditional family, the potential for dispute is significantly greater for families with more varied relationships. In these situations, careful planning may be needed in order to avoid a "Family Feud."
One of the most important considerations in an estate plan is the designation of the person who will handle your affairs, either during a lifetime incapacity or after your death. This person may be the executor, a trustee, the guardian for a minor child, or an agent under the power of attorney. In some cases, it may be appropriate to designate different people to handle these responsibilities. In all cases, however, this person should be able to communicate with all of the family members without controversy or hostility, and to handle all decisions fairly. Although it is most common for our clients to designate a spouse or children to handle these tasks, this may not be the best choice if the spouse is the step-parent of the children, when children have not attained an age of maturity, or when children have not grown up together. Even when a family doesn't resemble Cinderella or Sleeping Beauty, it is natural for some family members to favor others. It just may not be consistent with your intentions.
Of course, the most important consideration in any estate plan is the intended disposition of estate assets. If you can anticipate the most likely disputes, you can direct a distribution which is designed to minimize potential conflicts. Surprisingly enough, most families divide personal possessions without controversy, although it is often helpful when clients decide on the distribution of the most valuable or sentimental items, such as an engagement ring or family heirlooms. The most common dispute, however, relates to the rights of a step-parent who is living in the family home, especially if the children are anxious to sell this property after their parent's death. Waiting for a step-parent to die or otherwise vacate the home doesn't always foster a loving relationship. Similar issues can arise when a child is living in the home, or when the property is to be shared by multiple children and their families, such as a vacation home. Although many clients would like to think that their family will get along after their deaths, this is not always the case.
There is no right answer, and even the best solution may change over time, as circumstances change. In recent years, our office helped administer an estate where the outdated estate plan included a significant gift to a former girlfriend, but neglected to provide for the decedent's fiance. We have also been involved in an estate where a decedent's Will included a multi-million dollar gift of property that he no longer owned. Needless to say, this was not the intended disposition at the time of death and litigation ensued in both estates. Although we did not draft the documents involved in either of these estates, our clients were unhappy spending a significant portion of their inheritance on legal fees.
As you begin the new years, please take a few minutes to review the choices that you have made in your estate plan and consider the changes which are needed at this time.