The Most Challenging Estate Planning Issues May Surprise You

Earlier this year, a survey of estate planning professionals across a range of professions revealed that the biggest obstacle in the estate planning process isn’t taxes, legal requirements, or expense—it’s your family. More specifically, 44% of those surveyed by TD Wealth identified family conflict as the biggest obstacle in estate planning. More practical considerations, such as tax reform and market changes, took a distant second and third.

Posted on April 24, 2018

The Most Challenging Estate Planning Issues

Given the significant role family conflict (or concern about family conflict) plays in estate planning, it may come as little surprise that the most difficult question for many people is “Who?” The estate planning documents that most often give people trouble, the survey said, are:

• Appointment of a guardian
• Designation of beneficiaries
• Will
• Power of attorney

In other words, the elements of estate planning that involve entrusting responsibility to another person or choosing the person or people who will receive assets are more difficult for most people than decisions that impact the person doing the planning, such as advance healthcare directives and Medicaid planning.

Common Points of Conflict for Families

While every family is different, certain issues tend to trigger drama and clashes among family members. For example:

• The appointment of one sibling as healthcare proxy, particularly if the family is divided on how to proceed with care
• The appointment of one sibling as personal representative, particularly if there are trust issues with regard to management of the estate
• The nomination of a guardian for minor children
• The bequest of a specific asset, especially one such as the family home, to a specific person

Unfortunately, you can’t always please everyone, and some family tension may be unavoidable unless you are willing to sacrifice important goals.

Making Tough Decisions in Estate Planning

While avoiding family conflict is an admirable goal and a factor worth considering, there are other equally (or more) important considerations as you make estate planning decisions. It’s critical that as you navigate estate planning issues, you don’t lose sight of your objectives.

Protecting Yourself and Your Minor Children

A power of attorney is drafted to protect you, and the nomination of guardian is drafted to provide for your minor children. Making the wrong choice in order to keep the peace can have serious consequences for everyone involved—even those you’re trying to spare.

In some cases, you may choose not to appoint someone because you know it would cause stress for that person or conflict among family members. While that may be a reasonable decision, appointing someone you would not otherwise have chosen just to keep the peace is generally not. While family tensions may weigh into your decision-making, you must keep the reason you are making the appointment and the person’s ability and willingness to fulfill that responsibility according to your wishes in the front of your mind.

Protecting Your Heirs and Beneficiaries

You want to ensure that your loved ones are provided for after your death, but your objectives may not be the same as theirs. For example, you might believe that one of your adult children would benefit more from a trust than a direct bequest, though he would prefer to inherit outright.

From a practical and trust perspective, you may want an older sibling or another close family member to act as trustee. But, making one family member the decision-maker for another who isn’t medically or legally incapacitated can be source of ongoing conflict in the family. In this situation, you must carefully and realistically consider the parties and the potential for problems—it may be better to appoint a neutral party to act as trustee.

An Experienced Estate Planning Lawyer Can Help

Estate planning issues that may be sensitive for certain family members can be difficult to face and difficult to resolve. Working with an experienced estate planning lawyer can help to keep your key goals in focus and to balance the emotional and relationship-based concerns with practical considerations.