Have you ever inherited anything from a deceased relative? If so, you know it's a bittersweet experience. Inheritance gifts hold many sentiments. They can alter your life if consisting of large sums of money or valuable property such as real estate or jewels.
Inherited gifts can be a blessing or a curse. As a probate liquidator, I've watched many families engage in inheritance wars over a deceased relative's belongings. I've also seen the disappointment on people's faces when they discover everything their relative owned has to be sold to pay off outstanding debts or past due taxes.
There are all sorts of issues associated with death. When decedents write a Will they provide written directives of how they want their belongings distributed. This may or may not set well with heirs. If someone isn't pleased they can file a lawsuit against the estate and contest the Will.
Most people don't have to contend with that, but if it happens it is quite upsetting for everyone involved. It's also very expensive for both parties and can be devastating to small estates with little financial assets.
The good news is regardless of family dynamics there is several estate planning strategies that can reduce the possibility of family disputes over property. Wills are powerful documents that can be safeguarded against being contested by inserting a no-contest clause. Should heirs decide to move forward with legal proceedings they forfeit their right to receive any inheritance property.
In addition to writing a Will, individuals can setup beneficiaries to receive certain kinds of assets. When property is gifted through assignment of beneficiaries no one can contest because the assets aren't recorded in the Will.
Beneficiaries can be established for money held in financial institutions, retirement accounts, investment portfolios, and life insurance proceeds. It's a simple process that only requires filling out a form and will resolve a lot of issues at the time of death.
Most people find it helpful to talk with a professional estate planner to figure out what they need. Every person has unique circumstances that require different strategies. However, everyone needs a Will, healthcare proxy, and power of attorney.
Healthcare proxies inform loved ones of your desires regarding the type of medical treatment you do or don't want. Oftentimes, people prefer not to think about being in a situation where they are unable to communicate, but if the unthinkable happens isn't it better to let relatives know if you want to be on life support or not?
Power of attorney grants authorization to a person to act on your behalf should you become incapacitated. POA rights are pretty powerful, so it's essential to choose the right person. Sadly, there have been instances of people taking advantage of loved ones and clearing out bank accounts or selling valuable property under the guise of power of attorney.
A last will and testament lets you name people to receive your belongings upon death. This document is also necessary for appointing a legal guardian for minor children or adults assigned to your care.
These documents cover the most vital elements of estate planning. Once in place, they provide peace of mind knowing everything is taken care of. Wills can be updated as needed and POA rights can be revoked at any time.
The only way to assure loved ones receive inherited gifts is to participate in estate planning. Without planning, estates are settled in accordance with probate laws. Instead of leaving things to chance, take time to become informed about asset protection. We encourage you to begin by perusing our estate planning and inheritance article library.
Published on August 30, 2011 at 03:05 AM