Dividing Your Assets in a Will

No single event has greater potential for dividing a family than dividing an inheritance. This often brings out the best in some people and the worst in others. Even in the most stable families, some members view their relative worth only as tangible assets). In the highly charged emotional environment surrounding the loss of a loved one, any strains in the relationships of those left behind are magnified. Suspicious minds are more finely honed and, if the estate is left to the survivors to divide, any spark can ignite a small conflagration. (Read our related article on fairness in dividing family assets.)

You can minimize the potential for a family meltdown by consulting an estate attorney when you prepare your will, and by leaving precise, written instructions for dividing your assets among your heirs. You can divide your assets any way you want, but the guidelines must be presented clearly in writing.

The portion of your estate covered by a will includes both tangible assets, such as your home or your car, furniture, artwork and other collectibles, and intangible assets, such as bank accounts, stocks, insurance policies and mutual fund shares owned in your name. You don’t want to describe all your assets in your will to be sure you don’t leave out existing assets and assets obtained subsequent to the drafting of the will. Instead, you want to describe only those assets to be bequeathed to specific heirs; then divide the rest of your estate in specific ratios to specific heirs. An example might be 20% of the total in all your bank accounts (and list them) to each of your five children.

When you divide your assets, be precise in your wording so your intentions cannot be misunderstood. (Click here for an article on minimizing confusion among your heirs.) Be especially careful to avoid ambiguous statements. For example:

John writes in his will: “I bequeath my sailboat to my daughter, Penny, and the remainder of my estate to my son, Jack.” According to Jack, the trailer on which the sailboat stands is his; or

David’s will says he leaves all his cash to his daughter Janet, but does not specify exactly what this cash is. Is it the bills and coins that David had in his wallet on the day he died? Does it include his savings account at the bank, or perhaps the returns of his life insurance policy? Or is it simply the balance in his checking account?

Besides preventing endless legal hassles, clarity in your will regarding the division of your assets will go a long way towards keeping peace in the family once you are gone.

Case Studies: Dividing Your Assets in a Will

Case Study 1: Specific Bequests

Sarah carefully drafted her will, leaving precise instructions for dividing her assets among her heirs. She bequeathed her sailboat to her daughter, Penny, and the remainder of her estate to her son, Jack. By being clear and specific in her wording, Sarah minimized the potential for misunderstandings and ensured her intentions were accurately carried out.

Case Study 2: Avoiding Ambiguity

David’s will stated that he leaves all his cash to his daughter, Janet, without specifying the exact cash included. This ambiguity led to confusion among his heirs. Did it include the bills and coins in his wallet, his savings account, or the returns of his life insurance policy? By failing to be precise in his wording, David unintentionally caused disputes and legal hassles for his family.

Case Study 3: Dividing Tangible and Intangible Assets

Lisa divided her assets in her will, distinguishing between tangible and intangible assets. She specified which items, such as her home, car, furniture, and artwork, would be bequeathed to specific heirs. For the rest of her estate, she divided it among her heirs in specific ratios. This clear division prevented confusion and ensured that each heir received their intended share.