Methods for Protecting Inherited Property
Most of us have inherited money or property from a relative that has passed away. Receiving inheritance is often bittersweet because it signifies our loved one isn't around any longer. On the other hand inheriting cash or valuable property can forever change our lives.
Sometimes inherited property causes rifts within the family. As an investor that specializes in probate liquidation I've seen countless family disputes over inheritance break out in courtrooms. I've also seen personal representatives forced to sell estate assets because decedents didn't engage in adequate estate planning.
The best approach for lessening potential problems is to write a Will and supply directives about how the estate needs to be settled and who will be charged with the duties.
When there is substantial family discord the potential for heirs to contest the Will is greater. When this occurs, estate assets are tied-up in court while attorneys argue their case. Contesting a Will is a costly process that hardly ever ends in a good way.
The good news is most families don't have to worry about having a Will contested, but if it does take place it is usually extremely destructive to family relations. In addition to broken relationships contesting a Will usually takes away inherited gifts from other heirs and beneficiaries.
One way to lessen risk is to insert a no-contest clause in the Will. Basically, this states that if heirs contest the Will they give up their right to gifts that were bequeathed to them. A more drastic measure is to write someone out of the Will by including a disinheritance clause.
While most people wouldn't dream of disinheriting relatives there are times when it is appropriate. It is strongly recommended to obtain legal counsel if there is need to disinherit direct lineage heirs.
Inheritance property can be kept out of probate by arranging beneficiaries to receive property and cash. Beneficiaries can be setup for money held in bank accounts; safe deposit box contents; investment and retirement portfolios; titled property; personal property; and life insurance policies.
Establishing beneficiaries will expedite the transfer of property and may reduce inheritance taxes. Additionally, property with assigned beneficiaries is exempt from probate. This reduces the value of the estate and can minimize risks of heirs contesting the Will.
It's always a good idea to consult with an estate planner or probate lawyer. Everyone has different needs and will want to utilize a variety of methods. With that being said, everyone should take time to write a Will, healthcare proxy, and durable power of attorney.
The Will provides directives as to how assets should be divided, along with instructions about estate planning methods that have been taken. Healthcare proxies designate an agent to make medical decisions if a person becomes incapacitated. Some states require making use of a durable power of attorney instead.
Durable power of attorney is often used in conjunction with a living trust. Power of attorney privileges typically cease once a person dies. However, when a durable POA is attached to a living trust the powers continue throughout the process of estate settlement.
The aforementioned are the basics of estate planning. These documents can expedite the probate process and ensure beneficiaries acquire the inherited items bequeathed to them in the Will.
Sometimes inherited property causes rifts within the family. As an investor that specializes in probate liquidation I've seen countless family disputes over inheritance break out in courtrooms. I've also seen personal representatives forced to sell estate assets because decedents didn't engage in adequate estate planning.
The best approach for lessening potential problems is to write a Will and supply directives about how the estate needs to be settled and who will be charged with the duties.
When there is substantial family discord the potential for heirs to contest the Will is greater. When this occurs, estate assets are tied-up in court while attorneys argue their case. Contesting a Will is a costly process that hardly ever ends in a good way.
The good news is most families don't have to worry about having a Will contested, but if it does take place it is usually extremely destructive to family relations. In addition to broken relationships contesting a Will usually takes away inherited gifts from other heirs and beneficiaries.
One way to lessen risk is to insert a no-contest clause in the Will. Basically, this states that if heirs contest the Will they give up their right to gifts that were bequeathed to them. A more drastic measure is to write someone out of the Will by including a disinheritance clause.
While most people wouldn't dream of disinheriting relatives there are times when it is appropriate. It is strongly recommended to obtain legal counsel if there is need to disinherit direct lineage heirs.
Inheritance property can be kept out of probate by arranging beneficiaries to receive property and cash. Beneficiaries can be setup for money held in bank accounts; safe deposit box contents; investment and retirement portfolios; titled property; personal property; and life insurance policies.
Establishing beneficiaries will expedite the transfer of property and may reduce inheritance taxes. Additionally, property with assigned beneficiaries is exempt from probate. This reduces the value of the estate and can minimize risks of heirs contesting the Will.
It's always a good idea to consult with an estate planner or probate lawyer. Everyone has different needs and will want to utilize a variety of methods. With that being said, everyone should take time to write a Will, healthcare proxy, and durable power of attorney.
The Will provides directives as to how assets should be divided, along with instructions about estate planning methods that have been taken. Healthcare proxies designate an agent to make medical decisions if a person becomes incapacitated. Some states require making use of a durable power of attorney instead.
Durable power of attorney is often used in conjunction with a living trust. Power of attorney privileges typically cease once a person dies. However, when a durable POA is attached to a living trust the powers continue throughout the process of estate settlement.
The aforementioned are the basics of estate planning. These documents can expedite the probate process and ensure beneficiaries acquire the inherited items bequeathed to them in the Will.
