If you are just beginning the estate planning process in New York, there are some simple steps you can take to help you create a plan that will help avoid many of the common events that lead to needless estate litigation. When we talk about estate litigation, we are talking about lawsuits or legal actions that arise because of the estate planning tools you created or the choices you made.
Though it is not possible to create an estate plan that will guarantee that no litigation will erupt, it is possible to create a plan that minimizes this risk. Here are some ideas you should keep in mind as you go about the estate planning process that will help your estate minimize the risk of any estate litigation.
Estate litigation arises because of inheritances.
Estate litigation is the exception rather than the norm. While your estate may have to be probated, it will likely not wind up in a legal battle. If it does, that battle likely arises out of the inheritance decisions you make.
In particular, choosing to leave different inheritances to people who are equally related to you is one of the riskier choices you can make. For example, let’s say you have four children. The two eldest are significantly older than the two youngest, who are still in elementary school. Should you give the older children the same inheritance you give to the younger children? If the older children need, for example, money for a down payment on a home, should you give them more?
Different people arrive at different answers to these questions, yet the general principle remains. Giving unequal inheritances to people of the same degree of relationship is often problematic. It’s helpful to begin with the assumption that you will give equal inheritances to those who are equally related to you. If you want to give different inheritances, you should have a clear reason why you are choosing to do this.
Estate litigation arises because you forgot about the gifts you made.
Let’s say that, using the above example, you gave $20,000 to one of your adult children to help her with the down payment on a new home. You made no mention of this gift in your estate plan, and chose to give each of your children equal inheritances. When it comes time to distribute your estate, will that $20,000 gift cause a problem? Though there is no guarantee it would, there is a good chance that it might. Always keep track of the gifts, loans, and advances you give to relatives. When it comes time to make inheritance choices, keep these gifts in mind and make sure you take them into account.