You've probably heard at least one horror story about adult children fighting over how to divide up possessions or whether to keep or sell those precious family heirlooms after their parents have died.
In most cases, it's not the monetary value that fuels these family feuds, but the sentimental value of things like photographs, personal effects, jewelry, and artwork.
Here's what you can do to prevent family disputes regarding those precious family heirlooms handed down through the generations.
1. Write a will
Writing a will is just one part of the estate planning process, albeit an important one. A will spells out who gets what property and assets—stating, for example, that possessions are to be divided equally among the children.
A will can be as specific or as general as you'd like. Still, unless you make a point to include detail about specific items, the wording can be fairly general and often may not specify exactly who gets what.
2. Have the difficult conversations now
Most estate planning experts recommend gathering the entire family together while everyone is still alive and healthy and creating an inventory list of "special possessions," with the heir's name written next to it. This list can then become part of the estate planning documents—either the will or a revocable living trust.
An alternate method is to label each object or possession with the child's name, using a sticker. Family members should bear in mind, however, that this method is not legally binding. That being said, this method of dividing up possessions is usually fairly effective for most siblings.
3. Appoint a trustee or executor
A trustee or executor manages and oversees the assets of the estate. The executor's job is to settle the estate and communicate to heirs what is happening with the estate. It's fairly straightforward unless, of course, there are disputes.
Typically the oldest child is chosen for this "job," but an executor can be any trusted person who is a good mediator.
4. Add a 'no-contest clause'
Some states allow you to insert a "no-contest clause" into your will or trust. This method is highly effective at discouraging family disputes because heirs who contest the will won't be entitled to any part of the inheritance.
5. Plan to sell at auction
Some families opt to sell family heirlooms and other possessions at either a public or online auction. In both cases, all family possessions are up for auction, and children must bid on items they want to have.
Alternatively, family members can be given "credits," using money they will inherit to purchase items so they don't have to use their own money.
