EP Wealth’s Scott Upham, CIMA®, CPWA®, shares how clear communication, updated documents, and proactive estate planning can help families minimize disputes over inherited wealth.
Inherited wealth can bring about emotional and logistical complications, especially when family dynamics, outdated estate plans, or lack of clarity enter the picture. In my work at EP Wealth, I’ve seen that even well-intentioned estate plans can lead to disputes if they aren’t regularly reviewed, clearly communicated, and backed by professional guidance.
Before conflicts begin, here are key strategies worth considering:
Beneficiary designations can override a will or trust, and that mismatch is often what leads to problems. In second marriages, for example, naming a new spouse as the primary IRA beneficiary may seem reasonable, but if that spouse later passes the assets to their own children, the original owner’s children could be unintentionally excluded. This kind of result can happen even when no harm was intended; it’s often just a matter of missed follow-through or lack of awareness.
Outdated forms are another frequent issue. If beneficiary designations aren’t updated after major life changes—like divorce, remarriage, or the birth of grandchildren—they can result in distributions that don't align with the person’s current wishes.
Adding a child as a joint account owner for convenience—perhaps to help pay bills—can have unexpected consequences. In some states, that account may pass entirely to the surviving joint owner, bypassing the rest of the estate. I've worked with families where this single action caused years of resentment between siblings. Relationships were permanently damaged after a parent unintentionally created a sole inheritance for one child just by the way a bank account was titled.
It’s common for parents to default to a 50/50 split between children, thinking it is the most fair or least controversial option. But equal distributions do not always reflect the full picture, especially when one child has provided ongoing care or is in a very different financial position than their siblings.
On the other hand, when an estate plan does include an unequal distribution, but there is no explanation given for it, that can also create confusion and resentment. Decisions that seem logical to one person can feel arbitrary or even hurtful to others. That is why it is important to consider both the numbers and the context, and to clearly express the reasoning behind your choices whenever possible.
In many families that are able to avoid conflict over inheritance, clear communication plays a central role. That doesn’t mean putting every financial detail on the table, but it does mean being clear, direct, and proactive about what you intend.
Start by expressing your wishes in plain English. “Here’s what I want to happen, and here’s why.” That context can be especially important when the plan involves unequal treatment, shared property, or complex distributions.
Whenever possible, have conversations with heirs one-on-one before gathering everyone together. Group conversations can surface emotions and misunderstandings quickly; laying groundwork ahead of time can help ease those tensions.
As financial advisors, we’re often asked to play a role in these discussions with heirs. We’re not there to take sides, but to help bridge differences in financial knowledge, personality styles, and expectations. Having a third party in the room who understands the full picture but isn’t emotionally involved can help prevent a difficult conversation from turning into a lasting conflict.
In times of stress, like the death of a loved one or a health crisis, families often turn to us to help them think things through clearly and make rational decisions. Another part of our job is to consider the “worst case scenarios” in regard to inheritance planning that most people would rather avoid. We’re paid to be objective and to identify potential conflicts or oversights so they can be addressed early and as constructively as possible.
What’s really fulfilling in this job is being able to empower families with the tools and knowledge they need to make confident decisions and carry out their plans exactly according to their intentions.
An estate plan that once felt complete can become outdated more quickly than people expect. Even documents created four or five years ago may no longer reflect current family needs, tax laws, or financial priorities. Life moves fast, and the assumptions behind an old plan may not hold up today.
Here are a few common reasons plans stop working as intended:
The point is not that the original plan was flawed. It may have been exactly right at the time. But plans age, and the risk of conflict grows when they are left untouched for too long.
Reviewing your documents regularly with a qualified advisor or estate attorney is one of the most effective ways to help minimize disputes and potentially reduce stress for the people who may eventually carry out your wishes.
Older estate plans often divide assets between a family trust and a marital trust to preserve estate tax exemptions. But depending on how those trusts are written, this structure can limit access to funds for a surviving spouse.
For instance, if all assets go into the family trust and that trust only allows income distributions, the surviving spouse may not be able to access principal when needed. Meanwhile, the marital trust, which may have allowed broader access, is left empty. This can create financial strain, even when the original intent was to provide support.
Plans like these made sense when estate tax limits were much lower. But without updates, they can create unnecessary restrictions or overlook better options available under the current law.
These can be helpful when multiple heirs will inherit real estate or a business. They offer a governance framework for decision-making and allow for more flexibility if one family member wants to sell or step away.
Without this structure in place, disagreements over property use, management, or liquidity can lead to prolonged conflict or even legal disputes between family members.
Often used for long-term planning, irrevocable trusts can help define how assets are used and protected. But they must be structured with clarity. Vague or overly complex language can lead to confusion—and in some cases, litigation.
Estate planning should reflect where your family is today, not where it was years ago. Revisiting your plan regularly can help reduce the risk of conflict and support the outcomes you intend. An estate planning advisor at EP Wealth can help you navigate updates, evaluate potential issues, and bring clarity to complex decisions.
Contact an advisor near you to explore EP Wealth's estate planning services and discuss your unique financial planning needs.
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