Death and taxes are two certainties that we have to face and accept every time either one of them comes knocking on our doors. We never nurture any resentment in paying taxes for it is the price we have to pay for the protection and bounty we enjoy from the state. Neither can we complain, when the Reaper appears.
It is therefore foolish to say that taxes are the biggest threat to your inheritance. History tells us that almost all disputes arising from proper distribution or sharing of wealth left by a departed loved one turns messy and even deadly among the surviving heirs.
Terra International Realty, based on some poll and study finds out there are more problems encountered when an individual dies intestate, that is without a will than one with complete estate planning or a last will and testament. These are some thoughts to consider why taxes aren’t the threat to your potential windfall:
Lawyers, accountants and administrators point to conflict and dispute among family members as the biggest threat to sharing of inheritances.
A poll by TD Wealth showed that 44 percent of attorneys, trust officers and accountants cited family conflicts as the biggest threat to estate planning.
Even with the estate tax exemption at $11.2 million per person, some wealthy families and business owners loved to stage some drama..
It turns out modern families create more estate planning problems and complications
Blended families, multiple ex-spouses, kids from prior marriages and situations where one spouse is much younger than the other can pose some potential problems.
Individuals who die intestate — leave everything up to the state in which they reside.
“In New York, if you die without a will and leave behind a spouse and kids, your spouse gets $50,000 plus half of the balance, and what’s left is split evenly between the children.
To address the conflict and keep the peace between family members, while ensuring the assets are divided the way it should be, a estate plan should be drafted:
Teach the beneficiaries on the how and why of your estate plan.
Don’t leave your family members in the dark about your estate plans, keeping your arrangements a surpriseuntil your death.
For instance, beneficiaries who are receiving their share in a trust might interpret that as a punitive action to create an obstacle between them and their inheritance. When you create a trust, you’re not punishing your kids — you’re protecting them. This way, they have access to the funds when it’s appropriate, and when the money is in the trust, it’s beyond the reach of court claims.
Now is the time to take a second look at your will, trust documents, beneficiary designations and, if applicable, business succession plan.
There are two events that might trigger a review of an estate plan: New tax legislation and a change in your family situation — a birth, a death, a marriage or a divorce.
The divorce rate for those age 50 and older has doubled between 1990 and 2015: out of every 1,000 married people, 10 got divorced.
More millennials actively participate in the family today and would be resentful if they didn’t hear what was going on with their parent’s estate plan.