You know that you need to leave your assets to your children — and, potentially, to your grandchildren — when you pass away. You have started thinking about how you want to do this.
While digging into it, you have started to worry. Are the children going to wind up disputing the estate plan or fighting over the assets? Will you accidentally drive a wedge between two of your children after you’re gone? How do you make this go smoothly and avoid these types of difficult arguments?
To understand how it may play out, let’s take a look at some of the reasons for these disputes.
1. The children already have an idea of what they think they deserve
Children may already have thought about what they expect to get, even if they haven’t told you yet. This could be a number amount. It could be an expectation regarding a specific asset. Either way, if they do not wind up getting what they assumed they would, it can lead to disputes. Is it wise to talk to them in advance to avoid confusion, jealousy and unmet expectations?
2. The children did not save money for their own retirement
One potential issue is that your kids may count on you for their own retirement planning. Studies have found that many adults do not have as much as they’ll need in savings, and many more do not have a financial plan that will get them there in time. If they’re planning on retiring based on their inheritance, they may fight to get as much as possible.
3. You do not have an estate plan at all
If you already started thinking about estate planning, you are well on your way to eliminating one of the major red flags. When children have no estate plan to go off of at all, it increases the odds of a serious dispute. Perhaps the best thing you can do for them is to get that plan in place early to address all of their concerns.
4. You have assets that you cannot divide between them
One issue you may have trouble avoiding is assets that you can’t divide. These may be sentimental — a painting, a boat, a family cabin. Technically, you can sell any asset and split up the money, but children may not want to sell sentimental items. Even so, they may contest who gets to keep them when only one person can.
If your goal is to avoid these disputes, you should make that a priority when doing your estate planning. Take the time to look into all of the options that you have.