Disputed inheritances produce tragic family divisions. Preventive measures, a few of which are outlined below, may avoid many common issues. Always consult experienced legal and tax counsel in inheritance matters.
Inheritance is primarily a matter of state law. State law determines what happens to property ownership when the owner dies without a will (intestate). Both state and federal law may assess taxes. Categories of property keep expanding. Celebrity right of publicity is one example. Likewise, new forms of digital assets are starting to have legal rules applied to their inheritance. These new forms of property should be considered when reviewing inheritance matters.
As a foundational matter, many disputes may be avoided by having an up-to-date written and signed will that complies with the legal requirements of the testator's (one making the will) state of residency. While moving to a new state does not necessarily require making a new will, don't overlook having the will reviewed by experienced local legal counsel. Wills should be revised or rewritten when major life events occur such as the birth or adoption of a child, or divorce or remarriage. Likewise, significant changes in one's assets may require a new will.
It is risky to attempt to make one's own will by copying someone else's will or filling in the blanks on a form. One may fail to make a valid will. Additionally, a variety of small but significant points may be overlooked. For example, sometimes individuals are unaware that they own property such as a fractional mineral interest. A residuary clause in a will may greatly simplify the transfer of this asset. Again, attempting to avoid a legal expense may become very costly. While preparing a will, don't overlook preparing in a separate document a durable power of attorney to grant one or more individuals the right to manage property and make financial decisions in the event of an incapacitating event such as a traffic accident or a stroke.
Having prepared the will, do not write over it with a pen or pencil, crossing out words or making marginal notes. These marks may invalidate the original will without meeting the legal requirements to create a new valid will. If one fears that the will may be destroyed by an unsatisfied survivor, many states allow a will to be recorded in the public records. This exposes the will to public view and makes changes more complex, but is possible. Some individuals have a trusted attorney keep an original copy.
Several medical documents, readily available online or at hospitals, should be prepared in addition to a will. An individual can prepare these easily completed forms. A separate durable medical power of attorney allows a selected individual to make treatment decisions for an incapacitated patient. A living will specifies the overall course of medical treatment that one desires, especially the use of artificial life support. Does the individual want to make organ and tissue donations? Sometimes individuals do not want to be resuscitated and prepare, in consultation with their physician, a do-not-resuscitate (DNR) order. These documents may greatly reduce family anxiety and disputes. Obviously, these documents should be kept in a readily accessible and known location - certainly not a safety deposit box. Close friends or family members might be given copies. It is desirable to provide one's physician with a copy of the medically related documents.
The most frequent legal grounds for contesting the validity of a will are that the testator lacked mental (testamentary) capacity or was subjected to undue influence to act without free choice. The following are a few common ways to reduce the likelihood of a successful will contest:
1. Make gifts in advance of death or place property in joint ownership with survivorship. Survivorship means that the named survivor automatically owns the property when the benefactor dies.
2. Video the signing of the will together with some conversation that demonstrates mental capacity. Don't allow beneficiaries to be present and rehearse what the testator will discuss. Utilize a professional videographer. The videographer may provide testimony concerning the accuracy of the recording and the testator's mental state.
3. Avoid having beneficiaries prepare or witness the will. Even if legally permissible, one avoids the appearance of undue influence.
4. Select with care witnesses who will sign the will. Are they familiar with the testator, healthy, traceable and available, and would their testimony (if required) favorably impress a jury?
5. Consider writing checks to potential will contestants on the same day that the will is signed. Cashing the checks, it can be argued, indicated that the beneficiary believed the testator had the mental capacity to dispose of property. The cashed check provides proof of acceptance.
6. Make small gifts in the will to potential will contestants with a carefully prepared "no contest" clause that invalidates the gifts in the event of a will contest.
7. If individuals are to be disinherited, the will should name them and briefly explain why in a non-libelous and rational manner. Avoid the appearance of irrational or delusional mental incapacity. Unusual gifts, especially to non-relatives or charities, should in like manner be briefly explained.
8. A few states allow a form of pre-death probate in which the testator requests a declaratory judgment from a court that the will is valid.
9. Consider placing property in a trust fund to avoid probate altogether.
10. Utilize assets while alive in a way that reflects one's values and wishes, consequently reducing the amount of property subject to inheritance.
Apart from the will but readily accessible, consider preparing some personal notes to family members and friends, not overlooking those who have provided personal services. Consider including a small sum of money with which the recipient may purchase a keepsake or go out to eat. This simple courtesy will be appreciated and cherished.
Should an inheritance dispute occur, a family settlement agreement may avoid a court battle. All heirs enter into a contract subject to court approval that divides the inheritance. A neutral guardian must represent the interests of a minor or mentally incompetent heir.
This comment has briefly outlined a few of many ways to prevent common inheritance disputes. It is by no means comprehensive and is only intended to provide general background educational materials. Always involve experienced professionals in your will, probate, and inheritance situations.