Don't assume that you're immune from the sort of dire consequences that can tear apart a family after you're gone. What often starts as a minor beef over a few prized possessions can turn into a full-fledged war. Things can get even worse if distant relatives show up out of the blue, staking their claim. But you might be able to avoid future family squabbles by addressing these issues now. Start by listing your assets and deciding who will get what and when.
Here are several areas that may require some extra attention:
Business ownership. This can be complex if you run a company and have to decide who will be named as your successor. Figure out the best person (or persons) to take the helm. If that arrangement disproportionately benefits one or more heirs, you might designate other assets to go to the others to keep things fair. One possibility is to use a buy-sell agreement facilitating the sale of business interests. Note that it may be crucial to start by establishing the value of any business you own.
Vacation homes. Transferring rights to a principal residence is often straightforward, but what about that cabin in the woods or your seaside cottage? If you have several children, splitting ownership may be a problem if one child’s family expects to get more use out of the place. If you can’t work out an equitable solution, consider selling the vacation home and dividing the proceeds.
Second marriages. Suppose you’ve remarried (perhaps more than once) and you or your spouse—or both of you—have children from a prior marriage. Depending on how your will is worded, all of the children from both sides of the family may share evenly in the estate. As an alternative, you could use a trust as a vehicle for passing assets to particular beneficiaries you’ve chosen.
Jewelry and other valuables. When it comes to handing down your assets, don't leave any stone unturned, especially if it’s a rare diamond. Catalog all valuables and family heirlooms and make sure you’ve accounted for the major pieces in your will.
Of course, it's your business, house, and valuables, and you can do whatever you want with them. But it probably won't hurt-and it most likely will help-to open a dialogue with other family members. You may be able to head off potential problems by clearing the air instead of letting things fester.
One of the best things you can do is spell out your wishes clearly in your will and attach a letter of instruction for clarification. In some cases, it also makes sense to film a video showing that you were of a “sound mind” at the time that you made these decisions.
This article was written by a professional financial journalist for Preferred NY Financial Group,LLC and is not intended as legal or investment advice.