Family Dynamics in Estate Planning

Family Dynamics in Estate Planning

Anyone can write a will, but a skilled estate planning lawyer also understands family dynamics. From the parent who enables a financially irresponsible child to the daughter who wants to tell her mother what to say in her will, family members can make estate planning complicated.

And these dynamics may be so ingrained that the client isn’t even aware of them. Take, for example, the client who wants to leave the family business to a pair of siblings that are barely on speaking terms. The client may be so intent on being fair and keeping the business in the family that he doesn’t see that the plan can never work. A good estate planning lawyer must be able to spot these sorts of problems and offer the client more appropriate options.

Family issues can take many forms. Here are some common ones.

Undue Influence and Competency. Most estate planners are well aware of these issues and know how to spot red flags. Among them are the child or caregiver who brings an elderly person in for a significant change to a will. Lawyers should take care to establish that the testator, and not his or her family, is the client. They should also meet separately with the testator to make sure the person is competent and not under any duress or undue influence.

Disinherited children. Many experienced estate planners caution that disinheriting a child is an invitation to a will contest. To spare the remaining children the turmoil and expense, many lawyers recommend leaving some money or property to the child, with a stipulation that the child will forfeit that inheritance if her or she contests the will.

Making realistic plans. In their eagerness to distribute assets equally among their children, some people devise plans that will never work in practice. A couple might, for example, want to leave the family vacation home to their five children without considering whether all of the children want the home or can cooperate in its use and care. Question your clients on the practicality of their plans, and be ready to suggest other options.

Encourage discussions. Many people prepare wills and other estate planning documents and never discuss their assets or their estate plan with their children. The children may be shocked to find out their parents were deeply in debt, or left the family home to Charlie, when Susie was the one who really wanted it. This can lead to bitterness, resentment, and sometimes even litigation. Lawyers can encourage a better outcome by urging their clients to discuss their estate plans with their children.

Choosing administrators and powers of attorney. Many people think it’s an honor to be named administrator or executor of an estate, but it’s actually a difficult responsibility. Make sure your clients choose someone who is mature, responsible, and able to get along with other family members. Don’t let them pick someone as a reward. The same goes for financial and healthcare powers of attorney. Encourage clients to think carefully about who is most honest, reliable, available and willing to carry out their wishes.

Spotting Issues Where a Trust is Needed. Many people don’t think through the consequences of leaving money or property to someone outright. But a small inheritance can cause big problems for a person who receives disability payments. Or, someone who isn’t financially responsible may spend their way through their parent’s hard earned money in a short amount of time. By asking questions about the client’s heirs, an estate planner can spot situations where a trust may be a good idea.