Dividing Your Estate Among the Chosen Beneficiaries: Minimizing Confusion

Most Americans die without ever making a will, which is the worst mistake one can make in estate planning. Without a will, your property generally goes to the beneficiaries specified in the laws in your home state rather than those you might prefer to inherit. That can lead to disappointment and family discord.

Divorce, remarriage, or having children with more than one spouse are just a few of the things that complicate estate planning. Consider whether your family dynamics make it sensible to discussion your intentions with close relatives. (Read our related article on fairness in dividing family assets.) However, intentions alone are insufficient. It is essential to create a valid will and/or a trust.

To minimize the possibility of confusion among your chosen heirs, heed the following guidelines:

1. It almost always pays to have an estate lawyer prepare or review your will. It is far too easy to make a mistake with a stationery store or computer-generated will, resulting in huge costs and delays to your heirs.
2. Your will must be properly witnessed to be valid. Your beneficiaries should not be witnesses. (In states where holographic or handwritten wills are allowed, witnesses may not be required.)
3. Appoint a will executor to handle the distribution of your assets to your heirs and name substitutes should they be needed.
4. If you move to another state after your will has been signed, it remains valid. Yet it would be wise to have a lawyer in your new home state review it to avoid potential probate glitches.
5. Ownership of some property goes by beneficiary designation, not by will. Make sure your beneficiary designations are up-to-date.
6. Create a folder designated “Open in Case of Death”. Inside put contact information for your executor and lawyer, as well as the location of your will. Also include important financial information—bank account numbers, insurance policies, and data about stocks, bonds, and retirement funds. Include copies of your most recent income tax returns and your burial preferences. Tell your family where this folder is kept.
7. Makes estate planning choices while you are still healthy.

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Case Studies: Dividing Your Estate Among the Chosen Beneficiaries

Case Study 1: Intestate Succession

John passed away without creating a will, leading to his property being distributed according to the laws of his home state. Unfortunately, this distribution did not align with John’s preferred beneficiaries, causing disappointment and family discord. John’s situation emphasizes the importance of creating a valid will to ensure your property goes to those you intend.

Case Study 2: Complex Family Dynamics

Lisa had a blended family with children from multiple spouses. To avoid confusion and potential conflicts among her chosen heirs, Lisa engaged in open discussions about her estate plan with close relatives. Along with these conversations, she created a valid will and trust, clearly outlining her intentions and minimizing the possibility of misunderstandings.

Case Study 3: Communicating Intentions

David recognized that intentions alone are insufficient in estate planning. He not only created a valid will but also took the initiative to discuss his intentions with his chosen heirs. By openly communicating his wishes, David ensured that his heirs were aware of his plans and could act accordingly, minimizing the potential for confusion or disputes.