Wills and inheritances are a touchy subject for many families, especially for those who have worked hard to build a significant nest egg to pass on to the next generation of the family. 

One of the tax issues that has become an issue for this election season is the estate tax. Kamala Harris has proposed a huge increase, with taxes to be assessed on estates as low as $3.5 million, vs. the current $13.5 million, whereas Donald Trump has proposed elimination of all estate, gift, and GST (Generation Skipping Tax). 

Inheritances, Wills, and Family Strife

When it comes to estates, one of the most sensitive topics is a will that has been revised to be purposely inequitable to its heir beneficiaries. The reasons for someone (i.e., the testator) to change their will can vary widely, and is often the underlying rationale for murder mystery plotlines, both fictional and real. Some of these reasons may include:

• A new spouse and any children that may result from that marriage.
• One of the children does something to sufficiently anger the testator to cause a revision.
• A windfall or a major loss may cause the estate to reorganize its assets and possibly liquidate some items which may be specifically referenced in a will.
• The testator may have dementia or other mental afflictions that go undiagnosed until after the will revision has already been signed and notarized.
• The testator may use changes in a will to test the trustworthiness of his or her heirs.
• The testator may decide to divert some funds and assets towards charitable organizations instead of direct related beneficiaries, whom he or she may deem sufficiently well-off not to need the earlier inheritance sum allocations. 
• Reorganization was advised by an estate planner in order to lessen the impact of the estate tax. 

Family Will Revision Secrecy Demand

A Reddit post dealing with an inheritance-based family issue checked some of the boxes listed above and requested advice. The poster faced the following dilemma:

• The poster was informed that his father changed his will to leave all but one of his accounts and assets to him, cutting out the poster’s brother, demanding confidentiality as to the will revision.
• The poster’s mother has passed away and the brother has lived in another state for decades with limited family contact. 
• The poster sees his father weekly and assists him with chores and appointments.
• The poster’s father is of sound mind, and has acted unilaterally, without any advice, guidance, or lobbying from anyone else. 
• The poster is concerned about having foreknowledge of these will changes, the possible ensuing family and potential legal conflicts with the brother, and the father’s demand for secrecy.

Benefits of a Trust

The poster does not detail the nature of the father’s estate, but one can surmise that if the brother will only be left with half of one significant account while the bulk of the other accounts and assets are going to the poster, it is a substantial amount. One tool that the poster should suggest to the father, if it has not already been commenced, would be to put the assets in a revocable trust. This would alleviate many of the concerns of the poster:

• An estate planner establishing the trust can also examine the assets involved to discern the best way to minimize any applicable estate taxes, which can take a serious bite out of the estate if not structured strategically.
• If the father works with the estate planner, there is no need for the poster to be involved in or have knowledge of what steps are being made to the estate and will, relieving him of any secrecy vow that may inadvertently be breached in the future. 
• A non-family member trustee can be appointed as the executor of the will to disburse the trust assets in accordance with the will. This should help to minimize friction between the poster and his brother, as the trustee can act as an impartial referee for any family will or trust-related squabbles.
• If the brother is sufficiently incensed to take legal action to contest the will, the addition of the trust is another layer of protection in keeping with the father’s wishes, as it can mitigate a number of the legal arguments that may come from the brother’s attorney. 

The opinions expressed in this article should not be construed as professional legal, tax or financial advice. Professional attorneys, accountants and financial advisors should be sought if such counsel is desired. 

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.