Many of us were lucky to spend the recent holiday season with our families and reflect on the past year. However, for many people, family time can sometimes be overwhelming and often accompanied by announcements of significant changes and milestones in the family that impact our family dynamics. Some of these changes may bring joy, such as engagement and pregnancy announcements, but they can also bring challenges, such as a divorce, illness, or the loss of a loved one.

As we move past the holiday season, you may be reflecting on these announcements and the changes they bring, which may have sparked some anxiety and concerns about how to safeguard your loved ones in the future. Whether it’s a divorce or a pregnancy announcement, you may be wondering if it’s time to implement an estate plan or update an existing one.

Crafting an estate plan is a unique and personalized process that should align with the specific needs and dynamics of your family. Here are some general tips to consider as you contemplate your estate plan:

1. Involve Your Family Members: Involved family members are far less likely to initiate conflict or experience emotional distress if they are provided with explanations for the changes in your estate plan. For example, your previous Will may have divided the residue of your estate between your children equally. However, a recent divorce of one of your children leaves them in a financially vulnerable position, which may result in your desire to draft a new Will and provide more financial security for their future. While this may seem like a reasonable change to you, the other child may not be aware of this reasoning if you don’t explain it to them.

A great way to achieve this level of transparency is to hold a professionally mediated family conference. A family conference is an excellent opportunity for you to describe your estate plan to all those who may be impacted by it in the future, and assess their reactions to it. In some cases, this can be an opportunity to spot potential family conflicts, and adapt your estate plan accordingly to avoid future litigation between your family members.

2. Plan for Blended Families: Another tip to keep in mind is the importance of considering different family structures. If you or one of your family members went through a divorce and recently remarried, you may want to consider an updated estate plan that will take into account these changes. Otherwise, there is a risk that certain family members will be inadvertently excluded from your succession plan. For more tips on planning for blended families, read our blog here.

3. Voluntary Capacity Assessment: In some circumstances, it may be prudent to conduct a capacity assessment in order to ensure that your estate plan withstands post-death challenges. If you are at a point in your life where your physical and mental health begin to deteriorate, a voluntary capacity assessment can be a way to safeguard against future disgruntled beneficiaries.

4. Tax Planning: When preparing or updating an estate plan, it is also important to consider the various taxes that may be payable as part of the estate administration, including probate tax, capital gains tax, or other taxes triggered by deemed withdrawal. Inadequate estate planning can cause unnecessary tax burdens that can be avoided if proper assistance is provided by a professional who can help with tax planning in the most efficient way.

5. Work with an Estate Planning Professional: While there is an abundance of resources available online for “do it yourself” estate planning, including online will kits and cookie-cutter templates of testamentary documents, these tools can often cause misunderstandings among family members and even lead to very contentious litigation. All families are different and ever-changing, and require an estate plan that will reflect that accordingly.

In providing these general tips, we hope to offer guidance and alleviate any concerns or anxieties you may have in dealing with any changes your family may be going through after the holidays.

Thank you for reading.

Margarita Grup.