How to Make Most of Your Heirs Mad

Occasionally I will get an estate planning client who wants to leave all of his or her property to one child in the belief that  it will somehow make their estate easier to probate and that the chosen child will “know what to do.” This is a recipe for disaster. I have never prepared an estate plan that does this because I always talk the client out of it. I have two main objections: (1) the child is not obligated to follow the decedent’s instructions, and (2) if the child does follow the decedent’s instructions then they may be liable for gift taxes. 

Both objections come down to one basic problem. Once you have left all of your estate to a person, that person owns it and is not obligated to give it away. If they do give it away, then they may be liable for gift taxes for any amount in excess of $14,000 for the year (as of 2014). The First DCA confirmed that this was the case late last year. If you leave all of your estate to one person, that person has the discretion to honor your wishes or not. 

As you can imagine, this is a recipe for litigation. It is much better to take the time and effort to decide exactly how you want your estate divided than to kick off a fruitless and expensive battle between your heirs. Even if your heirs choose not to fight, you will have done extensive, probably irrevocable damage, to their relationships. 

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