No one wants to talk about estate planning but no one wants to leave their loved ones a nightmare either. To understand all the jargon, we turn to the American Bar Association.
If you want to put your estate planning on hold for this year, here are four significant problems families may face when settling your estate:
Probate Process Delays
The probate process, which validates a will and distributes assets, can be time-consuming. Delays may occur due to legal requirements, court schedules, and potential disputes among beneficiaries. These delays can create frustration and financial strain for the heirs. As the probate process drags on so do the legal fees go up.
Every state has different rules but it is best to get with an elder law attorney who knows the rules and can decide what’s best for you.
Most seniors will put their assets in a trust. This avoids probate and those horrible costs. Also, life insurance, IRAs, and pension plans can bypass probate if you have named a beneficiary who receives the asset upon your death.
You can also transfer your bank accounts on death. Most banks will allow you to do this. It’s important so that you leave the executor with funds to pay for your burial, taxes, and any other fees. On average, every executor should have $10,000 ready to spend within a month of your death regardless of how well you plan.
Family Disputes and Inheritance Conflicts
Inheritance can lead to family disputes, especially if there are disagreements over the distribution of assets. Sibling rivalries, differing interpretations of the will, or unclear instructions can escalate tensions, causing emotional strain and potential legal battles.
Disputes over who gets what, interpreting the will differently, and sibling showdowns can turn the whole affair into a soap opera, creating tension and potential legal showdowns. Then everybody gets a lawyer and soon well, nothing is left.
When I went over my assets with my kids, I was as proud as a peacock. I thought I had everything all set. Well, little did I know they had 49 questions they wanted me to answer. I never thought of this stuff and I had to go back to the drawing board. Tough group of kids I raised!
Tax Liabilities and Financial Complexities
Estate taxes, income taxes, and other financial obligations can significantly impact the value of the estate. Families face challenges in understanding and managing tax liabilities, which can lead to financial burdens and complications in asset distribution.
Do not make the mistake of stating your residency in a state you are no longer a resident. Many super seniors move to Florida and change their residency to Florida. When the northern states find out there has been a death of one of their residents, they might want a piece of the estate. Make sure you let your loved ones know never to fill out a death certificate without your elder law attorney. Changing a residency on this legal document can take months and thousands of dollars.
Managing and Selling Estate Assets
Selling off estate assets can be a real challenge. From deciding fair prices to finding buyers, it's like managing a huge garage sale, but with more emotional baggage. Getting through the process of liquidating property or belongings can be time-consuming and emotionally draining.
Not all family members are going to agree on who needs or gets what. When I stated that my car could go to whoever needed it the most, my kids went nuts, “Not OK!”, they said. You have to designate who gets it. If they do not want it, so we buy it from them. I was shocked.
This just goes to show us super seniors that we need to get this right. We don’t get a second chance so let’s make it easy on our families.
Be sure to pick up this list in the Super-Ager's Starter Guide, page 22 on the legal documents you should make now and put in a folder. Every year, just update it and let it be.
Less worry, more time for lovin’!
