I’ve seen many family rifts created over an estate. Without clear guidance on your wishes, heirs and relatives may descend into fights over your belongings, sometimes taking grudges to their own graves. Don’t let that happen to your family. Here are a few tips on how to smooth out the kinks of your will before you take your last bow.
The comments above & below are edited ([ ]) and abridged (…) excerpts from the original article by Mikey Rox (WiseBread.com)
1. Determine Beneficiaries in Your Life Insurance Policy Ahead of Time
If you have a life insurance policy, you have the option to name beneficiaries before you die. You can divide the payout evenly among those you’d like to name, or you can assign a particular percentage of the payout to each individual. Either way, you spare your beneficiaries the unpleasant conversation of who gets how much.
If there are any hurt feelings after the fact because this person or that person didn’t receive the payout they feel they deserve, it’s really not your problem anymore. At least you spelled out your wishes legally and ahead of time.
2. Involve Your Beneficiaries in Inheritance Decisions While You’re Alive
If you want to involve your family in the asset-dividing task while you’re still alive, there are a couple ways to make this work….2 options for family participation in asset assignment to avoid infighting when you pass are to:
1. hold a “round robin” where each beneficiary gets a turn picking an asset or heirloom.
- Make a complete list of your possessions, dividing it into both sentimental like coffee mugs, trophies, a wine opener, nostalgic popcorn bowl, etc. and valuable items suggest as furniture, silver, jewelry, and art.
- Drawing names is a great way to determine who starts the round robin, or you can easily go by birth order or other creative option for deciding who goes first.
- Then have each loved one choose an item off the “sentimental” list, then the “valuable” list, and so forth.
At the round robin’s completion, your loved ones have intentionally and thoughtfully selected your heirlooms. Then, you can decide what you give away now or what you intend to keep until you pass. Most importantly, you have a documented list indicating to whom all your sentimental and valuable items shall pass — as they deem fair.
2. give an equal amount of “play money” to each intended beneficiary.
- If necessary, hire an appraiser to value and price all of your assets.
- Each heir is then given the opportunity to “buy” items from the estate…
This approach makes the transfer of your possessions seamless after you’re gone. You can also have the satisfaction of knowing that heirlooms you hold dear will continue to be treasured by the next generation.
3. Include a Letter of Explanation in Your Will
Unless you have the good fortune of being part of the “perfect” family, your assets may not be divided equally — perhaps for good reason. It’s your right to divide your assets however you wish, but you can bet it may leave a sour taste in the mouth of whomever gets the short end of the stick.
To quell the hurt feelings, include a letter of explanation in your will. It can go a long way toward helping your loved ones understand your decisions. Maybe you’re giving less money and property to a more successful child so some of the less successful ones can turn their lives around. Whatever the reason — if you think an explanation is necessary, provide one.
4. Assign Assets and Let Loved Ones Swap Rights to Them
…Create groups of items that you think are equal in monetary or sentimental value.
- Each heir could be assigned a group of items at random, which would represent the inheritance of the heir…
- In the event that the heir was interested in an item belonging to another heir, the two can negotiate separately.
The above allows you to distribute your assets equally while lowering the chances your heirs will have to resort to litigation upon your death because, really, who wants to go to court to duke it out over a dead person’s stuff?
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