How to Protect an Estate from a Rotten Son-in-Law
Whatever the reason, whether your life is a bed of roses or a getting-worse-nightmare, there are things you can do now to ensure what you leave will go to who you want. And when. And in what portion or portions.
If you have been working for a while, you have an estate. If you have been working for a long time, you may even have a sizable estate, and between your home, insurance and growing retirement funds, your estate may reach the million dollar mark. That is the good news. But the bad news might be an adult child with a drug or drinking problem, or a child who married a person who does not deserve to inherit any part of your estate. Not to mention an ex-spouse or two. What will happen when you are not there to protect your estate?
There are steps to protect your estate and your family members.
Do Not Overlook Beneficiary Designations
Most employer-sponsored retirement and savings accounts have beneficiary designations to identify the people you wish to receive these assets when you die. Here is an important fact to know: the beneficiary designation overrides any language in your last will and testament. If your beneficiary designation on an account names a child but your will gives your estate to your spouse, your child will receive assets in the account, and your spouse will not receive any proceeds from the account.
Do Not Try to Sell a Property for Below-Market Value
The same goes for trying to remove assets from your ownership to qualify for Medicaid to cover long-term care costs. Selling your home to an adult child for $1 will not pass unnoticed. Estate taxes, gift taxes, income taxes and eligibility for government benefits cannot be avoided by this tactic.
Avoid Naming Specific Investments in a Will
A common estate planning mistake is to name specific investments in a will. A will becomes part of the public record when it is probated. Providing details in a will is asking for trouble, especially if a nefarious family member is looking for assets. And if the sale or other disposition of the named asset before your death impacts bequests, your estate may be vulnerable to litigation.
How Will You Leave Real Estate Assets to Heirs?
Real estate assets can be problematic and need special consideration. Are you leaving shares to a vacation home or the family home? If kids or their spouses do not get along, or one person wants to live in the home while others want to sell it, this could cause years of family fights.
Making a Bequest to a Grandchild Instead of a Troubled Adult Child
Minor children may not legally inherit property, so leaving assets to a grandchild does not avoid giving assets to an adult child. The most likely guardian will be their parent, undoing the attempt to keep assets out of the parent’s control.
Include a Residuary Clause in a Will or Trust
Residuary clauses are used to dispose of assets not specifically mentioned in a will or trust. Your estate planning attorney will create the residuary clauses most appropriate for your unique situations.
Prepare for the Unexpected
Your estate plan can be designed to address the unexpected. If a primary beneficiary like a daughter or son divorces their spouse, a trust could prevent the ex from gaining access to your assets.
An effective estate plan, prepared with an experienced estate planning attorney, can plan for all of the “what ifs” to protect loved ones after you have passed.
Contact our office today to schedule a consultation.
