Family Communication

A failure to communicate estate plans with family members often leads to post-mortem litigation and administrative confusion. Parents and adult children should discuss the outlines of their estate plans. Key questions to address include:

• Has a will or trust been executed?
• Where are the original documents stored?
• Who is named as the executor and successor trustee?
• How will physical assets and sentimental items be distributed?

Consider these common failures:

Medicaid Estate Recovery

An elderly widow, Mom, transfers her $400,000 home to her adult child to protect it from potential long-term care costs. If the child dies intestate before the mother, the asset is distributed under intestacy laws back to the mother, exposing the asset to Medicaid estate recovery.

Joint Property Disputes

A parent leaves a beachfront home to two children equally. One child wants to keep it, while the other wants to sell. Without clear instructions or a mechanism for one to buy out the other, the dispute can lead to a partition lawsuit, forcing a sale and destroying family relationships.

Open communication allows you to address these conflicts while you are still alive. For families with a business or pooled capital, the conversation is worth formalizing into a written agreement that explains how the family works, not just who inherits (section “The Family Operating Agreement: Explaining How the Family Works”).