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Discussing family estate plan can help minimize problems down the road, P.2

In our last post, we began speaking about the importance of having family discussions around estate planning. There are a number of good reasons for this, but the one we’ve been focusing on is that it reduced the likelihood that problems will arise down the road when it comes time to settle the estate in the probate process.

As we noted last time, unequal inheritance is a particularly common issue that can hang up an estate. Diminished capacity is another important thing to thing about in this context. Some estates run into problems when an aging, feeble parent makes changes to their will. Children may end up, later on, contesting their capacity to have made those changes. One way to address this potential issue is to have a physician validate the parent’s capacity when they make major changes to their will.

A similar concern arises with respect to charges of “undue influence.” This can occur when one child accuses another child of talking the parent into changing their will in order to favor that child. One planning strategy that can reduce the risk of litigation is to express in the will why certain changes were made and to have an independent, third party go over the changes with the parent and to witness the execution of the changes.

In cases where a parent chooses to disinherit a child, there can be hard feelings and litigation. Because of costs, these cases often settle. A parent can avoid this possibility by stating in their will that they are disinheriting a child and explain why they are doing so.

Another common scenario that can cause difficulties is when a child that provided care for a parent receives no extra compensation and expends their own resources in doing so. This, of course, is something that a parent can address in their will, but it is important to be careful about presenting the appearance of undue influence, particularly if a parent is vulnerable. Another possibility is for children to work together to keep records of money spent and to reimburse those who spend money to care for a parent, either through the parent’s funds during their life or from their estate at death.

Working with an experienced attorney on these and other common problems can make things go smoother down the road.

Source: The Birmingham News, “Children suing siblings over estate money,” October 16, 2012.