When working on an estate plan, you must address complicated family issues to limit family tension as much as possible. According to Forbes, sibling arguments, hostile relatives and spendthrift heirs can create a challenge for high-net-worth households.
Every family member may have different needs that you address in your estate plan, but it is your job to ensure that your family understands your choices. What types of family dynamics create the biggest challenge?
In blended families, start a conversation about why children from the first marriage may receive different assets than the children from a second marriage. In many cases, the inheritance of different assets might be due to sentimental value. You may want to have a flowchart of your estate plan so that you can explain it.
While siblings may have rivalries that outlast the estate plan, money can increase that tension. You may have siblings who look down on another for not making as much money, despite being successful in his or her career. Explain to your children that every person has a place in the plan. In choosing a trustee, you may also want to avoid choosing one of the children. Even if you know one child is more responsible than the others, it can become a source of resentment.
In a worst-case scenario, one of your children may be married to someone who would take advantage of the inheritance. An example is a husband who wants to fund his business ventures, despite their consistent failings. In the estate planning process, you can prevent a person from draining your family’s wealth.