FAMILIES Explain estate details while you are still alive

Estate planning can keep heirs from arguing.
DALLAS MORNING NEWS
It ranks as one of the most horrible of family schisms, erupting at an already emotionally charged time -- a fight over the estate of a loved one.
Such disputes can result in a permanent rupture of sibling relationships. To leave a loving legacy along with an inheritance, it's important that parents take special care in their end-of-life planning.
"Every year, heirs spend untold amounts of money and energy to contest wills and litigate trivial issues," says Viktor Szucs, a certified financial planner at Quest Capital Management in Dallas.
"Sometimes these battles are not spurred by questions of fairness but an absurd need to renew and resolve old sibling rivalries and perpetuate a family feud."
The aging of the baby boomer population gives the issue greater urgency. The boomers' parents are beginning to leave them an inheritance of what's expected to be several trillion dollars over the next few decades.
"We have done more family conferences in the past five years than in the previous 10 combined," Szucs said.
Purpose of meetings
The purpose of such meetings, he says, is to enable clients to share with their heirs how they're going to pass down assets, why they're doing it in the manner they've chosen, and to tell their children what role they're expected to play in maintaining the family's values and in managing their inheritance.
That's the right way to handle it, experts say. To avoid trouble after you're gone, talk about your reasons for bequeathing your estate the way you're doing it.
"Involve the family in the estate-planning process," says Michael Wald, an estate planning attorney and principal at Wald & amp; Associates in Richardson. "It shouldn't come as a surprise after somebody's died whom they're leaving their property to. If anybody has a problem with it, they should be able to express that while everybody's alive."
Don't forget to cover the nonfinancial issues that often cause bitterness among heirs.
"Oftentimes you get a lot of fighting over personal effects," says Brad Carson, senior vice president and trust officer at U.S. Trust Co. of Texas NA in Dallas.
"The upset comes more from situations where there's a void: 'Momma wanted me to have the china.' 'No she didn't, she promised it to us."'
If you own a family business, discuss who will run the show when you die.
"Many family fights involve a family business," Wald says. "One child thinks he or she is better to take over, but that child may never have worked in the business. These issues can be resolved by proper succession planning."
Create a trust
One thing to consider is to create a trust to administer your estate.
A trust is a legal entity that holds title to assets and property for the benefit of another person called a beneficiary. A trustee administers the trust, handling such duties as record-keeping, distribution of assets to beneficiaries and paying taxes.
The goal, of course, is for all recipients to agree that the outcome was fair to all. But fairness can be complicated.
Seeking a fair solution, you may want to give your kids equal shares of your estate. But that may not necessarily be the best thing, experts say.
"I've seen a lot of fighting where the will has been extremely fair to all three kids," Kotzer says. "Just by slapping an equal [share] on your will doesn't mean that the kids aren't going to fight, because there are other things in that equality that may create inequality."
For example, if one child has devoted a great amount of time to being your caregiver and your other child hasn't lifted a finger, would it really be fair to leave the unhelpful child as much as the caregiver child? What if one child has a much greater need, because he or she chose a lifetime of service to others over a lifetime of wealth accumulation?
If you're just ticked off at one kid and want to cut him or her out of your will, reconsider the notion.
"If you are thinking about leaving someone out of your will completely who may be expecting something -- usually adult children with whom relations are strained -- think twice," says Mike Lawson, an employee benefits attorney at Baker Botts LLP in Dallas who has worked in estate planning.
"Even if it is your wish that someone get nothing, consider the problems that could be caused among your loved ones if one receives nothing and the rest receive their fair share.
"It is not uncommon for someone who has been written out of a will to blame those who are beneficiaries under the will, even if the beneficiaries had nothing to do with it."
If you intend to leave a child out of your inheritance, at least explain why in your will, says Bryan Clintsman, a certified financial planner at Clintsman Financial Planning in Southlake, Texas.
"Being silent on this issue opens the will up for challenge in court by a snubbed child who could claim the parent forgot them," he says.