Most parents want to do everything they can to minimize the possibility of conflict among their loved ones after the parents pass away. Unfortunately, conflicts can arise if you have loaned or gifted money to certain children and not others.
Having a solid strategy inside your estate plan can minimize the possibility for conflict and a knowledgeable estate planning lawyer can help you to guard against these future disputes. If you give money to one child, then the other siblings might argue that that child should get a reduced share of your estate when you pass away. You can block such disputes by making the intent clear in your estate planning documents.
Your document might state, for example, that you will not make any adjustments based on gifts, which would make it clear to other siblings and family members that no one should be receiving a reduced share. You also could specify that gifts have been made if you intend to account for the fact that loans or gifts were already made to one child so that he or she understands why they are receiving a reduced share. Loans are another issue that can be addressed in a couple of different ways.
Verbal loans are very difficult to prove, so make sure that you update your estate planning documents to reference that verbal loans are a gift. If you have current verbal loans that you don’t want to be treated as a gift, you’ll need to put these in writing. It is very important that your estate planning documents convey your intent. This is a common challenge that emerges when you have made the loans or gifts to one member of your family and not others.
Many of our clients set up a trust to manage a smooth transfer of assets to the next generation in the way that works for them.
Need help with creating a trust or administering an existing trust? Contact our Virginia estate planning law office to learn more.