“My children will never fight over my things.”
That’s what every parent hopes, and what most parents believe, says estate-planning attorney Patti Spencer of Lancaster. Too bad it doesn’t always work out that cleanly.
“Families tend to keep relatively calm when mother and dad are still around,” Spencer says. But, after parents die, emotions are high, (and) resentments can surface.”
Spencer says clients tell her they have nothing of value worth fighting over — “but that doesn’t mean your family won’t fight over it,” she says.
According to AARP, about 60% of Americans have no will. “Some (people) are young and haven’t thought about it,” Spencer says. “Others just have avoidance behavior.”
The attorney outlines some of the more common mistakes people make and incorrect assumptions they have when it comes to dividing up estate. “There are so many traps for the unwary,” she says. “They’re easy to avoid, but you have to address them.”
- Spencer advises that, when someone dies, nothing be removed from the house until the will is produced and the executor distributes items. “It can be a free-for-all otherwise,” she says, “and these are people who otherwise wouldn’t dream of stealing — but, technically, that’s what they’re doing.”
- If it’s not written down in a will, it’s not legally binding. Mother may have said that necklace goes to a certain person, but her simply saying that is “absolutely irrelevant” legally, Spencer says.
- Same goes for “tagging” certain items with people’s names: That practice has no legal standing.
- A little note or memo tucked into the envelope with the will? Not legally binding.
- Assuming you can just take back an item that you gave the deceased as a gift? That’s not what the law allows, Spencer says. “You can ask, but you have no right to it.”
- Not declaring an item in an attempt to avoid the 4 1/2% inheritance tax? Not wise, Spencer says. “The Department of Revenue isn’t dumb,” she says. If it suspects there are items which haven’t been declared, that will call everything else into question “and you’re hurting yourself in the big picture ... Why file a fraudulent return to save 4 1/2% on a piece of furniture” and risk getting caught.
- Remember to make arrangements for digital access to accounts such as brokerage and retirement plans. Make a record of how to access all financial and social media records, online bills and anything digital, and keep those records in a safe deposit box. Make sure your executor knows the location of the box and key.
- Remember that some possessions come with added regulation. Ordinary guns such as hunting rifles will have fewer inheritance restrictions than will assault rifles, for instance, and the person inheriting must legally be permitted to have a weapon.
- Vehicles, too, can require some extra hoops to jump through. Title will need to be transferred, and no one should be driving the vehicle until they are insured to do so.
- If you’re asked to be executor of an estate, make sure you consider what’s involved, Spencer says. An executor can be held personally responsible if a mistake is made: a Tiffany lamp sold for $1 at auction, for instance. If the estate is holding a stock portfolio, Spencer says, the rule of thumb is that the executor should sell it ASAP so they are not held liable for unwisely investing it.