Christmas isn’t always a time of joy for families. Sometimes, along with all the dishes, you are left with a family fallout that takes you back to the proverbial drawing board where estate planning is concerned. Here’s a look at how a difficult Christmas experience could inform your estate planning decisions:
Reflecting on Executor and Guardian Choices
If an argument or disagreement during Christmas highlighted tension or incompatibility with someone you’ve named as your executor, trustee or guardian in your Will, it might be a good time to reconsider those choices. Choosing the wrong executor can lead to delays, disputes and unnecessary stress for your beneficiaries. For effective estate administration, it is important to choose individuals you trust and who can work together harmoniously.
Addressing Potential for Will Contests
A particularly contentious Christmas could signal a higher likelihood of future disputes over your estate. If you anticipate that certain family members might contest your Will, you should seek professional legal advice. We can suggest strategies to minimise the risk of successful claims against your estate, such as preparing a supplementary statement explaining your decisions or using specific legal structures or strategies to protect your assets.
Clarifying Beneficiary Designations
If conflicts arise over specific gifts or inheritance expectations, it’s important to review and clarify your beneficiary designations in your Will. Ensure your wishes are clearly stated and consider strategies to avoid ambiguity or potential for disputes. This could involve using more specific language to describe assets, putting place formal family agreements or communicating your intentions to your beneficiaries beforehand.
Considering Testamentary Trusts
In situations where you are concerned about a beneficiary’s ability to manage their inheritance due to conflict, financial instability, or other factors, a testamentary trust can be a valuable tool. This type of trust is established within your Will and allows a trustee to manage assets on behalf of the beneficiary, providing greater control and protection. It may also be a useful strategy to protect assets in the case of a marriage breakdown.
Disinheriting
You may be so upset that you have decided to disinherit one or more of your potential beneficiaries. This has the potential to lead to a ‘family provision claim’ where a person (who is entitled to make a claim) can argue that they have been left without adequate provision for his or her proper maintenance, education and advancement in life. There are a number of steps you can take to reduce the likelihood that the person will make a successful claim, but you will need to take legal advice on this.
Communicating Openly and Honestly
While conversations about estate planning can be difficult, they can also help prevent future conflict. The period after a Christmas fallout, may be a challenging time to broach this topic, so it may be better to have open and honest conversations with your family about your wishes and intentions before such an emotional time. This can alleviate anxiety and reduce the potential for misunderstandings or resentment later on (and hopefully ensure a happier Christmas lunch).
How we can help
It is essential to seek professional legal advice for any estate planning decisions. If you would like to speak to someone about developing a comprehensive estate plan, call us on 1300 654 590 or email us at wehelp@adlvlaw.com.au.
The information contained in this post is current at the date of editing – 17 December 2024.
