Warning Signs of Upcoming Estate DisputesShare this post
Identifying Warning Signs for Estate Disputes
Estate disputes are becoming increasingly common. These disputes can create new conflicts, inflame old ones, and squander assets that were supposed to make people’s lives better. In 2022, Bloomberg News reported that Americans can expect to inherit $72.6 trillion over the next quarter century—more than twice as much as a decade ago. With so much potential generational wealth on the line, there is always a risk that it will become the subject of a dispute.
While there are no guarantees, several actions may reduce the chances of a dispute. A good first step is to consider whether your situation involves one of the more common scenarios that push families into court. Do you have feuding siblings; second or third marriages; disparate treatment by parents; mental illness or addiction issues; estranged family members; and economic hardship among family members?
What can you do if one or more of these situations applies to your family? The most effective action depends largely on your goals and the personalities of those involved. Your estate planning attorney can help you anticipate disputes and to try to avert them.
How to Try and Avoid Estate Disputes
Some options to consider include:
- Updating your estate plan to ensure they can still accomplish the desired outcome, especially when there are changes to financial or familial circumstances (e.g., death of family members, divorce, or birth of a child).
- Include philanthropy in your planning. Because people are living longer, many children are nearing retirement when they inherit from their parents. Some parents choose to transfer their assets while they are still alive.
- Appoint Non-Family as Trustees. Disputes are more likely to arise if a family member acts as a Trustee without the confidence of beneficiaries. Real or perceived self-dealing, as well as a lack of transparency, often fuel suspicion and increase the chances for legal disputes.
- Have open family discussions. Discussing your plans with your family gives them time to understand your motivations, accept your intentions, and maybe defuse any disappointment. This approach, however, may also provoke immediate disputes or lobbying efforts to make changes.