Sadly, many families that got along well for decades, find themselves ripped apart by squabbles, when a relative dies. Money disputes can cause bitter emotions for years. We will refer as sibling conflicts, but the warring parties can be cousins, grandchildren, aunts, uncles, or any other relatives.
There are steps you can take to keep your family from acting like an episode of the Jerry Springer show after you are gone. Here are 3 tips for avoiding family disagreements about your will or trust.
Have a family meeting and openly reveal the essential components of your estate plan. Secrecy creates suspicion. There is rarely a sufficient justification for dropping a bombshell, when your expected beneficiaries discover what they receive. Save the drama for television, and choose peace in your family.
Call your children and other beneficiaries together and talk about what you plan to do with your money. It is your money, and you can do with it whatever you choose. However, you can use this as a vehicle for promoting family harmony, rather than sowing the seeds of conflict.
Do not go into detail, but generally showing them your plans can prevent problems later. For example, you might allocate much of your assets to fund college expenses for your grandchildren. If your children know about this beforehand, they will likely be happy about it. If you blindside them with it, not so much.
- Neither Punish nor Reward
Divide things equally among your children. Sometimes parents will give more to a child who has not done as well financially as the other children. Treating your children this way can cause resentment, as the other siblings will feel you penalized them for working hard and managing their finances.
Resist the temptation to give even one more dollar to the child who was your favorite, or to punish the child with whom you are displeased. Inheritance contains profound psychological implications. Loving your children equally and unconditionally, includes your estate plan.
- Avoid a Power Play
Name a third party, not one of your beneficiaries, to serve as the executor of your estate. When you name one child to make all the decisions, your other children will resent that child being in charge. If one child gets stuck with all the work of handling the estate and you include no fee for her time and work, she will resent that she had to do the job with no value given for her time and effort.
If you cannot afford to have a third party, such as an attorney or accountant, serve as executor, explain in writing why you chose one child over the others as executor. Try to assign some of the work to the other siblings. Discuss this decision at the family meeting. You might discover that the person you chose, does not want to serve as executor.
This article covers the general law, and your state might be different. Talk with a local elder law attorney.
Commonwealth Financial Network. “Avoiding Inheritance conflict in Your Family.” (accessed October 10, 2018) http://www.commonwealth.com/RepSiteContent/avoiding-inheritance-conflict.htm
AARP. “How to Avoid Inheritance Fights Among Your Adult Kids.” (accessed October 10, 2018) https://www.aarp.org/home-family/friends-family/info-2017/avoid-inheritance-fights-mq.html