Part 2 in a 2-Part Series
Last week, we started a two-part series about why your heirs may receive a smaller inheritance than they once thought. To read part one of this series, click here. This week, we tie up the series by focusing on other unexpected expenses beneficiaries could receive, as well as how to maximize their take.
Litigation Expenses for Heirs
Controversy between family members can prove disastrous. Myriad things impact the amount of money and property ultimately available for distribution to heirs. When beneficiaries fail to resolve the matter through mediation or negotiation, the gloves come off. Often, family members “lawyer up” and settle in for a long, drawn-out court battle. In such cases, attorney fees often spiral into the tens and even hundreds of thousands of dollars. The terms of the estate planning document often authorize the trustee or the executor to pay for a defense against attacks by the heirs or beneficiaries with proceeds from the estate. When this happens, everyone collects far less than they might expect.
Several ways to maximize available funds for heirs or beneficiaries:
- Carry life insurance so that your trustee or executor can quickly pay off any creditor claims at your death.
- Use non-probate methods for distributing assets. These include trusts and, when appropriate, beneficiary designations.
- Either alone or with the help of your attorney, write out a clear set of instructions. Give it to those who will take charge of your final affairs. They should understand exactly who your creditors are. Also, they should know which estate documents are recent, and who to contact when you die.
- Talk to your loved ones beforehand. Make sure they understand what to expect when you pass away. Also tell them about your expectations for them.
- Work to resolve disputes between loved ones. Do this while you are alive. This is preferable to leaving things to chance when your affairs wind down and someone administrates your estate or trust.
- Clearly specify who gets what so that everyone is on the same page.
- Consider making funeral arrangements. You could even purchase a prepaid funeral plan before you die.
- Work closely with your attorney to fund your trust. Also, make sure your other estate planning documents are up to date and clearly reflect your wishes.
The effort that you put into planning your estate today significantly impacts the amount of money and property heirs and beneficiaries will one day collect. And, even still, properly set expectations for your beneficiaries. While you can’t pre-pay or eliminate all expenses, you should make sure no one mentally spends the money they expect.
About Skvarna Law in Glendora and Upland, California
Skvarna Law Firm operates offices in Glendora and Upland, California. We provide legal services. We cover San Bernardino, Los Angeles, Orange and Riverside Counties. This includes several cities. Upland, Ontario, Rancho Cucamonga, Fontana, Colton, Rialto, Chino, Chino Hills, Glendora, Claremont, Pomona, La Verne, Montclair, San Dimas, Azusa, Covina, West Covina, Diamond Bar, Walnut, La Puente, Corona, Norco & Mira Loma. Visit SkvarnaLaw.com to learn more.
