All responsible parents want a secure future for their children. All the time we spend on our jobs, all the overtime hours, the houses we build, the apartments we buy – all of that is to leave something behind to our kids. However, even with the best intentions in mind, we sometimes make mistakes that can have some lasting and very unpleasant consequences. For instance, poor communication and lack of estate planning can cause numerous quarrels amongst the siblings. In some cases, the grievances are so deep they need to be resolved in court. No parent could wish for something like that.
So, let’s take a look at a couple of ways these unfortunate situations can be avoided.
Create an estate plan now
Writing your will while you are still young and in good health is important for a couple of reasons. First of all, you want to protect your loved ones from unpredictable. No one knows what can happen tomorrow and even the most basically drawn out will is better than no will at all. Second, the longer the document has an opportunity to sit until being used, the lower are the chances someone will be able to argue that you didn’t have enough time to make amends, that you were under false pretenses, or that you were not in sound mind.
Introduce family member to your advisors
To put it simply, your lawyers, brokers, property manages and other advisors are familiar with your real estate situation and personal finances. In the case of some unpredictable event, these advisers will be able to provide tips for better financial management and distribution of properties. Introducing them to your family members early on will build the necessary trust and make the transition of assets smooth. On the other hand, knowing your kids can help these professionals to assess their life goals and create appropriate financial plans.
Recognize the underlying family disputes
All families have their small disputes. Unfortunately, some of these disputes can grow into real grievances that can tear the families apart. Your job as a responsible parent will be to recognize these problems and compose your will in a precise manner that will allow impartial and professional distribution of estate to the descendants without any further frictions. One of the ways to do so is to openly talk with the family members, try to amend or at least recognize their problems and talk openly about your plans for the distribution of property and assets.
Appoint a third-party objective trustee
Appointing one of the children (usually the oldest kid) or a spouse is a fairly common practice all around the world. The fact we see it so often, however, doesn’t make it any more reliable or fair. In fact, putting the pressure of interpreting the provisions of the will (some of which may be unclear or poorly phrased) only invites the disputes you are trying to avoid. The most prudent move, therefore, would be to avoid this dated practice and put this responsibility in the hands of an objective, reputable executor that will be able to act without any emotional involvement or pretenses.
Start transferring your assets during life
Slowly transferring your possessions and wealth while you are still alive can prevent conflicts that come as a result of your absence. This gradual transition of wealth also allows you to assess the needs of your children and make the necessary changes on the go. What are the legally acceptable ways to approach this issue? Transferring the funds to dedicated savings accounts seems like the most prudent move. The limit for the amount of money you are allowed to gift without paying the tax sits at $15,000, so there’s another way to pass the wealth to the most loved ones.
Address the gifts, taxes, and advances
This is especially important if you have already transferred considerable assets. If you don’t want your children to quarrel over the unequal treatment, you will need to address all gifts, loans, taxes, and advances that involve that are related to their inheritance. If your assets won’t be distributed equally for one reason or reason or another, the motives need to be clearly explained. Any disputable provision that is left ambiguous can cause the only problem and create a rift between the beneficiaries.
We hope these few tips gave you some idea about the ways you can fairly transfer your assets to your children and protect your legacy. All the wealth we earn during our lives will one day pass to our descendants. You don’t want something you have fought so hard to gain to become something that will tear apart your family.
