Estate fights are common, whether a few hundred dollars or millions of dollars are at stake. The disputes often end up in probate and expand into full-fledged protracted courtroom battles. No matter how little you’re leaving behind, it’s always a good idea to law-proof the estate plan.
Here are a few tips.
Keep Track of Loans
If you’ve lent money to your heirs, you must specify whether you’d want the loan to be forgiven or repaid after your death. Make sure you have this in writing; otherwise, things could get troublesome.
Let’s consider an example. Assume you gifted a house to one of your children with $50,000 as a downpayment. You update your Will to state that the gift should be considered an ‘advancement.’ If the children get an equal inheritance, the $50,000 will count against the one child's share who received the gift. If you clarify this in the will, it’llcan help you reach your intended result and help reduce the likelihood of litigation surrounding such issue.
If you're planning on bequeathing something to your heirs, then check the ownership titling and also make sure that you own it. This could help you understand what should happen upon death and help you avoid uncertainty for any potential beneficiary and/or co-owner. For example, if you own your home with your spouse as tenants in common instead of as joint tenants with right of survivorship, well, that’s a HUGE difference. Both can be problematic depending on the outcome that you want. How such asset it titled actually has a huge bearing on whether or not the asset, or a portion thereof, needs to pass through the court system prior to distribution.
Another issue is that of inconsistency.. This frequently occurs in a battle of paperwork. Does the institution’s beneficiary designation trump the Last Will & Testament or vice versa? The former is the answer. So if you update your Will thinking that it will automatically update your beneficiaries on your IRAs, brokerage accounts, home, etc., then you (or more precisely your heirs) are likely to be in for a huge surprise one day. So coordinate with an attorney to make sure you know how YOUR life savings is set to pass to your beneficiares.
Most good attorneys will show you something that you didn’t know and that could have a huge impact on your money and your beneficiaries. Some people try to save a few hundred dollars or even a few thousand dollars in some cases, but sometimes it costs their beneficiaries 6 or 7 figures. It’s your life savings, so make sure you get it right.
Transfer Your Business
We’ve seen businesses evaporate overnight when the owner dies.The loss results from poor planning or delayed planning that never got done. If your business doesn’t have a succession plan, then you could have major problems because your bank account could get frozen and your employees, vendors, etc. can’t get paid.Your clients might not be able to get serviced, etc.It can be a nightmare that can’t be reversed.So speak with an attorney to see if your business is best served by using a living trust, LLC operating agreement, buy/sell agreement, etc.The will and trust lawyers at Mike Massey Law would be glad to help you with your estate planning. Get in touch with our estate probate attorneys if you’re based in Austin, Houston, or San Antonio.