Methods to Safeguard Inherited Property and Lessen Family Disputes

Have you ever inherited property from a deceased relative? If so, chances are it was a bittersweet process. One on hand it's great to have items that belonged to a loved one, but on the other it's sad they are no longer around.

There's little doubt receiving inherited assets can better your life, especially when it's lump sum cash or valuable property. However, being a beneficiary can sometimes result in family disagreements that lead to inheritance wars.

As a probate liquidator, I spend a lot of time in courtrooms to buy assets sold through auctions. There are many reasons estate agents sell assets. The most common is to sell property to pay off decedents' outstanding debts. Another is to cover costs of legal fees caused by heirs contesting the Will.

When family disputes over property occur there is probability that heirs will initiate a lawsuit against the estate. I've sat through enough court sessions to realize there are times when heirs truly were entitled to valuable property that wasn't bequeathed in the Will. I've also witnessed many frivolous claims that did nothing but destroy family relations and bankrupt the estate with legal costs.

While writing a Will is one of the best methods for safeguarding inheritance gifts, there is estate planning strategies that can reduce risk of having the Will contested. A few well-known methods include: inserting a no-contest clause within the Will; transferring assets to a trust; and setting up assignment of beneficiaries.

A no-contest clause essentially claims that if heirs contest the Will they agree to forfeit any property gifted to them. A more drastic measure is to insert a disinheritance clause which explains why the heir was written out of the Will. Most people would never think of disinheriting a relative, but there are times when it is necessary.

When property is transferred to a trust the assets are no longer part of the estate and do not have to undergo probate. This method is primarily used by people whose estates surpass $100,000. People with smaller estates can use assignment of beneficiaries to lessen the amount of probated assets.

When property is gifted to beneficiaries the assets are not part of the estate. This lessens estate value and allows property to be transferred to heirs prior to settlement. Several kinds of property can be gifted in this manner including: financial and retirement investments; cash held in checking and savings accounts and safe deposit boxes; titled property; and life insurance proceeds.

The process for assigning beneficiaries is quite simple. Account holders fill out a form with the financial institution where funds are secured. They can choose as many beneficiaries as they want and designate a percentage of funds to be gifted to each.

The best approach is to work with a estate planner and determine which methods offer the most protection. Every estate is unique and calls for different strategies. Estate planning can eliminate many problems associated with closing an estate. People that write a Will and take measures to safeguard inherited gifts can have peace of mind knowing their loved ones will know how to close their estate and receive items they want to pass along.