Here are four ways to help heirs avoid extra time, money, stress, and acrimony after you pass.
1. Keep documents updated. Having a will or living trust is essential—but is not enough. Four things are likely to change during your lifetime: estate planning laws, tax laws, your family dynamics, and the composition of your assets; therefore, it is important to review and update your documents properly, to ensure your estate plan continues to reflect your intentions.
2. Address digital assets. Many people have digital assets, including email, online photos, documents stored on laptops, etc. that could be lost if proper provisions are not put in place. It is essential to address digital assets in your estate plan, including, for example, who is in charge, where the passwords are held, who may access such passwords, where should the digital assets go, and which assets should remain private or be discarded.
Note: sensitive information should not be included in a will because it becomes public through the probate process and that puts the assets at risk.
3. Assign personal property in advance. Many people assume their heirs will figure out on their own how to divide personal property, but that can lead to fights. We have seen examples of sisters fighting over their mother’s jewelry collection, and siblings and cousins fighting over family photos. Some of our clients have had to hire professionals to mediate such disputes, at significant cost to all of the beneficiaries. Making a personal-property list as part of your estate plan will minimize the likelihood of such conflict in the future.
4. Share your thoughts; Leave notes. We recommend that our clients who have specific reasons for dividing assets or roles unevenly prepare a letter that explains their thought process, to help mitigate the potential for future conflicts. For example, clarify that you named a particular child as executor because she lives locally, but that you want all of your children to work together to settle the estate. Or, if you leave one child a specific asset – or more money than the others - explain why. This extra step may mean the difference between harmony and acrimony among your heirs, he says. Also, we recommend setting aside a folder with important information such as names, numbers and locations of accounts, and contact information for attorneys, accountants and financial advisers. This information may then be scanned into your estate planning file, for permanency.
If you have questions about a proper estate plan for your family, or any other matters related to business or estate planning, contact Fournier Legal Services to learn more.