Thoughtful estate planning can accomplish so much. Through estate planning we can address our own financial and care needs in preparation for aging. We can target assets to give to others, and ensure they are passed along efficiently. It’s safe to say that another important outcome of estate planning is family harmony: clarity is a gift–and a great conflict prevention strategy.
Unclear, Unfair, Unspoken…
Murky plans. Surprising asset distributions. Secrets. Unexplained decisions. Sweet intentions but sloppy details. Information gaps. These are the kinds of dynamics that can push even ordinarily calm family members into damaging conflicts, especially when grief is added to the mix. That’s why attorney Davis Schilken points out that an essential first step of estate planning is open communication:
Even the closest families can face tension and disagreements when a loved one passes away—especially if their estate plan is unclear or perceived as unfair. So how do you become the family that doesn’t fight?….The foundation of a harmonious estate plan begins long before any documents are signed. Open, honest conversations with family members about your wishes can prevent misunderstandings down the road. It may feel uncomfortable to talk about finances, inheritance, or end-of-life decisions, but proactive discussions can ease uncertainty and reduce the chances of conflict later. Tip: Consider holding a family meeting to share the goals of your estate plan and the reasoning behind key decisions. A trusted advisor or estate planning attorney can help mediate these conversations if needed.
Observing that “ambiguity is one of the biggest culprits of family disputes,” Schilken notes that through proactive communication, even decisions that may seem unusual, like fair but unequal gifting, can become acceptable: “Equal distribution among heirs is common, but not always what’s best or fair in every family. For example, one child may have received significant financial support during your lifetime, while another may be your primary caregiver. Discussing your choices in advance can help manage expectations and minimize resentment.” Once families are clear on plans and intentions, the formal documents that comprise a complete estate plan can be attended to, and should include:
- A will or revocable living trust that clearly outlines how assets will be distributed
- A durable power of attorney to manage financial matters if you’re incapacitated
- A healthcare proxy and living will to communicate your medical wishes
- Detailed instructions for handling personal items, digital assets, and special family heirlooms
When a will is created, a fiduciary, usually referred to as the executor, is designated to carry out the intentions expressed in the will. Ultimately, the executor is responsible for following state probate protocols to bring the affairs of the deceased to closure. If a trust is created as part of an estate plan, the fiduciary appointed to administer it is referred to as a trustee, and the assets in the trust can pass to beneficiaries without probate. Attorneys remind us that whether an estate plan is anchored by a will or a trust, it’s essential to select the fiduciary carefully: “This individual should be responsible, organized, impartial, and capable of managing complex tasks. Avoid choosing someone who may be perceived as biased or who could be overwhelmed by family dynamics. Sometimes, it may be best to appoint a neutral third party (like a professional fiduciary) to avoid placing a family member in the middle of potentially emotional decisions.”
Indeed, while historically it’s been common to designate close relations or friends to fiduciary roles, busy lives, families spread out across states or even countries, and other complexities often make the appointment of a professional fiduciary wise and even reassuring: “This option will ensure that the estate or trust is administered according to a professional’s fiduciary duties and responsibilities and should help prevent waste, mismanagement, and other issues with the estate. A professional fiduciary can be an attorney, a banker, a trust company employee, or even an accountant.”
Given the significant responsibilities involved in serving as a fiduciary, a type of bond, referred to as a fiduciary bond or an estate bond, is often required. Essentially, fiduciary and estate bonds serve as a guarantee that duties will be carried out in accordance with the law and in the best interests of the estate and its beneficiaries. Colonial Surety is here to help, whenever any type of fiduciary or estate bond is needed. As a leading national provider of many types of bonds, Colonial Surety makes it easy and speedy to obtain them. Simply: get a quote online, fill out the information, and enter a payment method. Print or e-file the bond from anywhere.
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