Estate planning is the best way to resolve family disputes—before they begin

When a loved one passes away, it can bring out the best and the worst in families. Grief brings up unexpected feelings: in addition to sadness and pain, it’s common to feel disoriented, anxious, and irate. There is no right way to grieve. Add old disputes, resentments, and hurt to the mix and the conflict is almost inevitable.

To avoid these expensive and damaging battles, one of the most powerful legacies a person can leave is an estate plan. Provide for your loved ones in a clear way that is communicated well ahead of time—and allow them to come together as a family after you’re gone.

Planning for your legacy in a personalized, holistic way is a powerful way to resolve family disputes before they begin. As the saying goes, “Sunlight is the best disinfectant.” But with 67 percent of Americans lacking an estate plan, education on estate planning is more important than ever. Here’s how to get started.

The first step: The will

Creating a last will and testament is the most important action you’ll take in estate planning. Having a will in place helps ensure that your assets are distributed according to your preferences, rather than by state law.

This is a crucial action to take, especially if there is potential for conflict among siblings and other beneficiaries. Family dynamics run deep, and when they are combined with money and the pain of loss, the combination can be explosive.

A will is made up of several parts. First, it includes a brief section identifying who you are and stating that this is your will. From there, you’ll name your executor, who will serve as the representative of your estate, along with any possible alternates.

Serving as executor is a big job, so it’s considerate to let that person know. And as always, it’s better to be transparent to avoid fights later between siblings, or between a stepparent and adult children, to name just two common examples.

Next in the will you will detail your wishes for your property and assets, name your beneficiaries, and specify what you want each of them to receive. If you have minor children or other dependents, you may also name a guardian and alternate guardians to take over parental responsibilities.

Keep in mind, if you are considering splitting up your assets in a way that’s not equal—for instance, if you want to disinherit one of your children—it is helpful to discuss this with them now, in order to avoid legal challenges from the disinherited child after your passing.

To make sure the will is legally binding, you’ll typically need two witnesses and a notary public to witness the signing. But there is some variation in this process from state to state, so be sure to look into your state’s requirements.

These decisions are hard, and with life’s twists and turns, you may change your mind. That’s okay. At any point in your lifetime, you can change your instructions and create a new will.

With the will: Make important decisions

These end-of-life preparations are difficult, but think of them as a gift you give to your family to make sure they are well taken care of after you are unable to do so. They are a way of expressing your love for them, while also telling them exactly what you would have wanted—to save them time, money, and stress.

End-of-life planning involves making your wishes known, whether those are legal, financial, medical, or anything else, in order to help you and those you love. This plan will look different for everyone, depending on your situation and personal preferences, but it generally involves preparing official documents that lay out your preferences and appoint someone you trust to make sure those decisions are carried out.

These wishes can be captured in these key documents:

• Advance Healthcare Directive. In this document, you can appoint a trusted person of your choosing and give them legal authority to make medical decisions on your behalf. when you cannot speak for yourself.

• Power of attorney. A financial power of attorney gives someone you trust control over your financial affairs during your lifetime, in the event that you are unable to manage your affairs—typically because of illness or injury.

• Funeral Directive. You can make your wishes known—such as which type of service you prefer, whether you should be buried or cremation, for instance—to make it easier for your loved ones to honor you in a meaningful way.

Common financial steps to take

Many people use financially planning tools to protect assets, avoid probate delays, and to potentially lessen your heirs’ tax burden.

For example, life insurance policies provide a lifeline for your family in the immediate weeks and months after your passing. And trusts are commonly used to make the probate process—which can last months, or even years—easier for families by reducing the value of the estate. They also can have tax benefits. In avoiding family conflicts, they can be helpful in providing clarity about who gets what, well ahead of your passing.

Another way to make your wishes clear and avoid confusion later is to make your beneficiary a joint owner on your property’s title, so that it passes automatically to that person when you pass. State laws vary in terms of exactly how this is done. But for property, trusts, and other estate planning, an experienced financial adviser can help you put your wishes into action.

In addition, you can also give gifts during your lifetime to transfer assets to heirs, whether that’s items of value like jewelry or cash. The IRS has a gift tax exclusion, that sets a maximum on the amount of cash you can give away without paying tax. As of 2024, the gift tax exclusion was $18,000 per year.

There are many options for structuring your finances in order to create a legacy you’ll leave behind. But estate planning can be as simple as you’d like it to be—and the first step of creating a will is the most impactful and lasting. Particularly if you want your legacy to encourage family harmony, clarity is the best policy.

As you prepare to make these decisions, it is helpful to start thinking about some important questions that can guide you in your decision-making. What would be most important to me, if things went wrong? What would I want for those I care most about? How would I want them to be taken care of? What legacy do I hope to leave behind?

Thinking about these things and understanding where your values lie will make it easier to create the plan that is right for you and for those you love.