You may have taken the time to create well structured wills and trusts, but what about disputes amongst beneficiaries? These can result in bitter family relations, costly court proceedings and financial devastation. There are a few common challenges which may present themselves upon your passing. The following are some proactive measures you can take to avoid common challenges and ensure your documents accomplish your intended goals.
Make specific bequests: While monetary assets can be divided easily, determining the true value of heirlooms and tangible property is not. Statements in wills or trust which divide all “tangible personal property” amongst heirs in substantially equal shares may leave room for arguing and bitterness among your heirs. Substantive value can be based upon several
characteristics including emotional and sentimental worth. Discuss this issue with your beneficiaries to determine the personal significance of certain items. By inserting specific bequests into your will or trust, you can mitigate squabbles regarding that antique lamp in the living room or your grandmother’s diamond ring.
Account for gifts given during lifetime: If you gifted money or property to an heir in the past, you might account for it in your plan. If your goal is to treat all your children equally, you could perhaps address this gift in your will or trust. You may classify any gift as an advancement, with the value of the gift counting as part of that beneficiary’s share. For example, if you gave your daughter $5,000 toward student loans, you could specifically state under her residuary share “less $5,000 gifted for student loan payments during my lifetime.” Insert a no-contest clause in your will: Typically, a no-contest clause says that if a beneficiary challenges the validity of the will and fails, that beneficiary will forfeit any inheritance they would have received. The clause acts as a threat and discourages those seeking to receive a bigger piece of the pie than they were left. If you know a beneficiary is prone to conflict, inserting this statement can help prevent heated legal battles and ensure your estate is distributed as intended.
Prove your Competence: Will contesters often claim the maker of the will was incompetent or under duress during the signing of their will. To avoid these allegations, you may want to consider obtaining a medical evaluation which will confirm you are mentally competent and understand the nature and consequences of signing a will. This statement can be included in the will or presented to a court if the will is challenged. Another required way to establish competence when signing a will is to have two disinterested witnesses present at the signing. Witnesses can attest to the individual’s mental capacity and ability to understand the nature and consequences of signing a will. In many jurisdictions, including Indiana, witnesses are required by law to sign the will in the presence of the individual and each other, and to affirm that they believe the individual is of sound mind and not under any form of duress.
Disinherit any heirs: Simply leaving certain family members out of your will can be a source of contention among beneficiaries. If you are going to disinherit someone, make sure it is noted clearly in your will so there can be no question as to whether you intended to exclude them. The privacy offered by a trust plan, as opposed to simply creating a will, can help facilitate difficult and potentially inflammatory decisions to leave someone out.
