How to Avoid Family Feuds Over Your Inheritance
3 ways to keep the peace and save your estate
As Liz Moyer reported recently in The Wall Street Journal, families can take several steps when building their estate plans to head off such strife. Here are three of the most effective:
1. Decide what “fair” means. Given that different assets and possessions will have different values for different family members, dividing an estate into equal shares can be difficult at best. But a focus on “fairness” can help.
A parent, for instance, might decide to leave more money to an adult child who struggles financially and a smaller inheritance to a child who has struck it rich on her own. A disabled child might need to inherit funds for long-term care — but wouldn’t find much use for a family vacation home.
“When it comes to property and possessions, it’s almost impossible to be equal,” says Marlene Stum, a professor of family social science at the University of Minnesota in St. Paul and author of a book about the family dynamics of inheritance, Who Gets Grandma’s Yellow Pie Plate?
At this point, ask family members for their input. You might think your daughter wants the Steinway piano when she doesn’t or you might have given little thought to a box of old holiday decorations while all three of your children are maneuvering to claim it for themselves.
Says David Cutner, an elder-law attorney at Lamson & Cutner in New York, “It’s not about the money. It’s more about, ‘Did Mom or Dad love me?’”
3. Even the score. Instead of itemizing who gets what, a simple way of dividing assets is to get your property and possessions appraised and then have the children or grandchildren take turns choosing what they want while you are still alive, says Ronnie Ringel, a managing director at Fiduciary Trust in New York, a unit of asset-management firm Franklin Resources. Disputed items could be offered for bidding in a family auction.
Perhaps most important: Be consistent and clear. For instance, if one in-law is allowed into the decision-making circle, all of them should be. Listening only to the most outspoken child and ignoring the rest, or being unclear about how and why a certain decision was made regarding assets, also can breed mistrust.
“People change their minds or the children don’t necessarily want what you plan to give them,” says Stum. “Sometimes it’s nice to keep things flexible.”
Glenn Ruffenach is News Editor at The Wall Street Journal, responsible for the Journal’s coverage of retirement finances and retirement planning.