5 Ways to Protect Your Estate
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You have worked hard to build your estate. Every purchase, every investment, every financial decision has been made so you can leave an inheritance that is also a legacy. Phelps Law, serving Phoenix, Chandler, and Mesa, is a second generation estate planning law firm dedicated to helping you create an estate plan that protects your assets from unforeseen and unexpected circumstances.
Your greatest assets are your children. Sadly, children and other heirs often fight over the estate of a deceased parent due to greed, fear, attachment, and jealousy. Family feuds generally do not benefit anyone, and thankfully, they can be avoided. Here are 5 ways we suggest to protect your estate from family squabbles:
Create a trust instead of a will
Young children may fight over who’s the boss. The eldest does not always prevail, and sometimes, there’s a nose that gets bent out of shape. In a highly competitive family, there is often a contest over possessions and privileges. These sibling behaviors often persist into adulthood, and many times surface over inheritances.
Because a will needs to be settled through probate court, the provisions of the will can be contested. This takes control of your estate out of your hands, necessitates the need for expensive lawyers, and creates delays of the asset distributions. It is all too common in settling estates.
The best way to avoid this kind of fighting over your estate after you die is to create a trust instead of a will. By doing this, you avoid probate altogether. A revocable living trust establishes who gets what and is administered by the successor trustee you name, not a judge. It greatly reduces the possibility of claims against the estate, preserving the inheritance for the heirs you have named.
Treat children equally
Usually, an adult child fights over an estate plan because they feel they are getting less than the others. The simple solution is to divide the estate equally among the siblings. Other relatives may also share in the inheritance, but the children should receive equal value in their inheritance.
Review the estate plan with your family
Parents often don’t like to discuss financial matters with their children, especially when the kids are younger. When they are older and getting ready to take on responsibility for themselves, it is a good time to explain your estate plan to them. You can tell them what will happen with your estate after you die, what they will receive, and why you have made the decisions you have. This will head off most arguments that otherwise could come up if they are unaware of your intentions and desires.
Include a “no-contest” clause
A no-contest clause is a practical way to head off any claims against the estate by a beneficiary. It simply states that any beneficiary who contests the validity of the will or trust forfeits their interest in the estate. The administration of the estate can be contested without forfeiture, so it is wise to name a trust administrator who is trustworthy, understands the estate plan, and is diligent to execute it properly. Arizona’s laws on no-contest clauses need to be thoroughly understood by an attorney. Thankfully, Phelps Law has 40 years of experience with these kinds of issues.
Update your plan regularly
We have emphasized this before: life changes rapidly, and your goals, desires and circumstances often change as well. The same is true of your beneficiaries. By staying aware of their life situations, you may want to change your plan from time to time so that the distribution of your estate can truly benefit and protect them. With regular updating, your plan and their inheritances can be protected from things like divorce, business failures, and lawsuits.
With our knowledge and experience, Phelps Law is confident we can help you and your family with an estate plan that protects your assets and provides the most benefit to your heirs. Your first consultation with us is free, so please give us a call. Our number one priority is to help you leave a good and healthy legacy for your loved ones.
Images used under creative commons license (Commerical Use) 09/18/2019 Photo by Vera Arsic on Pexels