What often starts as a minor quarrel over a few prized possessions can turn into a full-fledged war between family members when a loved one passes away. You may be able to avoid these future family fights by listing your assets and deciding who will get what and when.
Start now by identifying some areas that may require some extra attention:
Business ownership. This can be complex if you run a company and have to decide who will be named as your successor. Determine the best person (or persons) to take the helm. One option is to use a buy-sell agreement facilitating the sale of business interests. Note that it may be crucial to start by establishing the value of any business you own.
Vacation homes. Transferring rights to a principal residence is often straightforward, but what about that cabin in the woods or your seaside cottage? If you have several children, splitting ownership may be a problem if one child’s family expects to get more use out of the place. If you can’t work out an equitable solution, consider selling the vacation home and dividing the proceeds.
Second marriages. Suppose you’ve remarried and you or your spouse—or both of you—have children from a prior marriage. Depending on how your will is worded, all of the children from both sides of the family may share evenly in the estate. As an alternative, you could use a trust as a vehicle for passing assets to chosen beneficiaries.
Jewelry and other valuables. Catalog all valuables and family heirlooms and make sure you’ve accounted for the major pieces in your will.
Of course, it’s your business, house, and valuables, and you can do whatever you want with them. But it probably won’t hurt—and it most likely will help—to open a dialogue with other family members.
See our related blog post: Three Rules for Making Financial Planning a Family Affair
For more information, visit our website at www.makinglifecount.com or contact KHC President Matt Starkey at email@example.com or (913) 345-1881.