Sometimes the best way to learn how to manage wealth is to look at people who have a lot of it. Two of the wealthiest individuals on Earth, Bill Gates and Warren Buffet, have announced that they are leaving a fraction of their assets to relatives, and a bulk of it to charitable foundations. They are touring the world attempting to convince other ultra-wealthy individuals to do the same.
While most Floridians will not have the wealth of these people, there are many important reasons to think about how to distribute assets after death, regardless of the size of the estate. As the chief operating officer of a trust company in Florida points out, if distribution issues are not dealt with before the death of parents, real problems often begin between heirs. Sibling rivalry and other inter-family competition can cause no end of grief for those who are attempting to understand why certain decisions were made regarding the estate's distribution.
One of the best ways to deal with these issues is to communicate effectively with heirs before the death of the testator. Letting everyone know what to expect can save a lot pain later. Using a trust arrangement, especially in the case of large estates, with an explanation of how the wealth was secured and what the beneficiaries should think about when receiving the distributions, can be a good way to effectively head off disputes. Trusts allow assets to be distributed over time, with the wealth managed by a trustee in the meantime.
Regardless of an estate's size, a valid, specific will is essential in making sure the distribution of the estate goes as smoothly as possible. Specifying what heirs receive, even in the realm of personal items such as silverware or art, can help limit wrangling between family members. Being open about the process and getting the information and help necessary to create valid wills and trusts is important to ensure that legal disputes and tax liability will be limited. And, if after all this the family is still arguing over the assets while the testator is alive, they can always be left to charity.
Source: CNBC, "Smartest Decision Ever Made by Bill Gates, Warren Buffett," Constance Gustke, June 3, 2013