It’s almost universal that surprising estate planning leads to a court battle. If there’s one thing that upsets family members, it’s the shock of discovering that they’ve been left out of a will or that you’ve left your estate to your pet. If you want to avoid a lengthy estate battle, then it’s important not to leave behind surprising estate planning.
Surprising Estate Planning
Margaret Dickson lived in a modest tenement flat in Glasgow and when she died from cancer at the age of 72, the fortune she had amassed over the years shocked her family and friends. An only child who had never married or had children of her own, she had retired in 1986 and followed the advice of a stockbroker uncle. Her frugal lifestyle meant that her accumulation of cash, shares and stocks continued to grow until they were worth over £1 million. However, it was her estate planning that was the shock to the family.
The fortune only came to light when her cousin, appointed as executor, saw the contents of the will. Interestingly, Miss Dickson left only £20,000 to her family members and donated the rest of her estate to charities. This kind of revelation can often lead to bitter family disputes, especially when such a vast majority of the fortune is given to charity. Thankfully, in this case, Miss Dickson didn’t have children, siblings, parents or other dependents who might have had a legitimate claim on the estate. However it’s important to note that under Queensland law, family members (including children, step-children, and anyone classed as a ‘dependent’) could lodge a legitimate claim against the estate and contest the will in court.
Surprising estate planning like this is not advisable, particularly if you have a family. It is always preferable to be clear and direct in your will so that there is a minimum of conflict after your death. Communication is one of the best ways of avoiding a protracted court battle. As always, it is important to seek specialist advice when it comes to planning your estate. Below are some tips complied to assist you with your estate planning.
Tips for Estate Planning
Firstly, it is very important to clearly state who you want to receive certain assets. All your assets should be clearly identified within your will (except for assets that aren’t held by you personally, like family trusts, life insurance and super). It is also ideal to provide a reason why you believe your assets should be dealt with in a certain way, as that will reduce the likelihood of your will being challenged. If you do not prepare a will, then the legal system will determine who receives your assets based on whether you have dependents or have any debts. This is called dying intestate, and it can mean that you lose control of how your assets are dispersed. Also, do not forget to name a power of attorney. In the event that you are no longer able to manage your finances or health decisions, an appointed power of attorney can make those decisions for you.
Good estate planning can also provide you with some flexibility. If you do not wish for your beneficiary to receive their inheritance straight away due to their age or financial circumstances, you can place this money in a testamentary discretionary trust. In doing so, you must designate a trustee, and they will ensure that the beneficiary receives the money as per the guidelines in the trust. Another important implication of estate planning is to ensure that our decisions are as tax effective as possible.
Speaking of financial implications, you should also consider how much debt you may owe in the event of your death. It may result in some of your assets being sold to pay off the remaining debt. There’s no point leaving an investment property to your son, for example, if it needs to be sold to pay off the associated debt.
Always seek specialist legal advice, because wills and estates is a complex area of the law. A specialist can make sure you’ve missed nothing and that you’re not leaving behind surprising estate planning. A specialist will also make sure assets not directly covered by your will are taken care of, too.
Many professionals recommend telling your beneficiaries what they have inherited in the will. This will allow for problems to be dealt with before you pass away. If you tell your family of your assets and how you wish to distribute them, they can express their agreement or disagreement. If your family is unhappy, then you have the opportunity to change your will or at least to discuss your decisions with them. Don’t give into the temptation of leaving surprising estate planning!
For specialist advice, contact us today. We offer a free, 10-minute phone consultation.