Four things to know about estate planning that could help you avoid fights with your family
Baby boomers, people born between 1946 and 1964, are entering a time in their lives when they may want to consider end-of-life planning decisions. On Thursday’s St. Louis on the Air, host Don Marsh discussed estates, trusts, guardianship and other issues with Tina Babel, a principal with Carmody MacDonald who practices in the area of estates and trusts.
“We’re seeing more and more in the courts right now where things are going wrong: when there are problems with disability, capacity, someone dies and there is in-fighting,” Babel said. “There are a lot of family disputes with someone stuck in the middle, a lot of times a parent, sibling, someone…sometimes it doesn’t go as smoothly as we’d wish.”
Here are three things we learned about estate planning that may help you avoid such family disputes:
1. Trusts, more than wills, are the “way of the future”
Many people believe that if they have a will, they are in the clear in terms of family fights over what’s inside the will. Not the case, said Babel. The only way to keep your assets out of probate court (where inheritance issues are settled) is to set out your wishes in a trust.
“They are extremely important and the way of the future,” Babel said. “Everyone needs a will but what the will does nowadays transfers over to the trust. A trust helps you avoid probate. A trust takes it outside of the courts.”
2. Guardianship and conservatorship designations are growing in popularity
“The largest growing population right now is individuals over 85,” Babel said. “People who are elderly, when you’re over 85, studies show that half of them can suffer from Alzheimer’s. You have people living longer and Baby Boomers who are a large portion of the population [nearing this age], and you need people to take care of them. They need someone to handle their finances or to handle their medications.”
For someone to take care of your finances, you need to designate a conservator. For someone to take care of your personal decisions (like medicines, doctors, where you will live), you need to designate a guardian.
Babel said that the commissioner in St. Louis city has seen a 33 percent increase in guardianship applications over the past few years. Conservatorship is a little less popular because courts have trouble turning over financial rights to someone else.
3. If you are struggling to choose a child to administer your trust, turn to an objective third party
“[Parents] don’t want to favor one child over another or siblings don’t get along,” Babel said. “They know one child will handle the estate better than the others but when you do that you are essentially creating liability or issues or adversarial relationships. I would suggest you get that neutral, third party, company to do a good job. Yes, you have to pay money but it is a small fee and they handle things correctly, they know what they are doing. It takes away that adversarial relationship that forms when you pick one child.”
This will help reduce family in-fighting, Babel said. “I once almost went to court over a lamp.”
4. Update your estate planning documents every few years
“You have to update,” Babel said. “One, your family situations change. Two, the laws change. A good estate planner will contact you every few years. You always want to go back to your attorney if you have a new child, get married, get divorced. Whenever anything changes in your life or there is a change in law, it would make sense to update.”
St. Louis on the Air brings you the stories of St. Louis and the people who live, work and create in our region. St. Louis on the Air host Don Marsh and producers Mary Edwards, Alex Heuer and Kelly Moffitt give you the information you need to make informed decisions and stay in touch with our diverse and vibrant St. Louis region.