Drafting a will or trust requires careful planning, especially when you have multiple children to distribute property among. Not only do you want to consider which child to give specific assets to, but also to ensure that none of your children feel left out. Family disputes can unnecessarily slow down the process of passing on your estate. Even if your children are not prone to arguing with each other, it is important to think about what steps you can take to ease the distribution process and transfer your assets as efficiently as possible. Here are three suggestions to keep in mind when drafting your estate plan:
- Choose a neutral executor or trustee - While it may be ideal to assign a close family member as your executor or trustee, choosing one of your children may not be the best solution to preventing sibling disputes. To limit the potential for sibling rivalry, it can be helpful to designate the authority to a trusted neutral third party, such as a close friend or a relative who is not your child.
- Consider using a revocable living trust - A revocable living trust allows you to continue amending its terms or even revoke your assets altogether throughout the remainder of your lifetime, assuming you do not become mentally incapacitated. This route gives you the opportunity to reconsider the terms of your trust, should you find better ways to accommodate your children's interests and needs.
- Make use of automatic transfers - Some assets can be transferred automatically upon the owner's death, eliminating the opportunity for questions and debate. For financial assets like bank accounts, you can designate one of your children to be "Payable-on-Death," meaning that he or she will automatically inherit the money without having to wait for an executor or trustee's call. Other assets like real estate or vehicles may be "Transferred-on-Death," ensuring an automatic inheritance as well.
Your role matters
Each of your children is legally entitled to a share of your estate. You may want to distribute your assets in a way that will be profitable for your family, but it is still worth considering how each child can receive a fair share. While there is no way to guarantee how family dynamics will play out in your absence, you can play your part by helping to minimize the potential for bitter disagreements.