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What Heirs Want Even More Than Money

Here are five steps to help you avoid family inheritance problems

By Andrea Coombes and MarketWatch

The economic downturn, steep health-care costs and longer lives may mean less money being left to boomers by their parents. But boomers are unlikely to complain about that.

 

Why? It turns out it’s not about the money. Instead, boomers say personal keepsakes, family stories and last wishes are a far more important bequest than money.

(MORE: Focus on Passing Down Your Values, Not Money)

Fully 86 percent of boomers and 74 percent of Americans aged 72 and older said family stories and keeping their family history alive is the most important piece of their legacy, according to a 2012 survey conducted for Allianz Life Insurance Co. of North America.

 

And 64 percent of boomers and 58 percent of elders said family mementos and heirlooms are a key inheritance. Just 9 percent of boomers said they’re eager to inherit money; 14 percent of elders said financial assets are an important legacy to leave. The findings closely matched a similar Allianz survey in 2005.

 

“The things that make your family unique — not money, but stories and personal possessions — those are most important in the legacy discussion,” says Katie Libbe, vice president of consumer insights for Allianz Life, in Minneapolis.

(MORE: 4 Smart Ways to Leave a Legacy)

Sentimental vs. Monetary Value

 

But there are two problems: Families often fail to record their histories, so those stories tend to die with aging relatives. And family mementos are among the most common causes of conflict after a relative dies.

 

“It’s never about the money. It’s always about the tangible personal property,” says Mary Jane Olsavsky, a manager of PNC Wealth Management’s Pittsburgh estate settlement group, who for almost 25 years has worked with families to distribute estates.

 

“Money can be divided pretty evenly, but the teacup that grandma always used? Maybe there’s only a $2 value associated with that teacup, but because of the sentimental value and the emotions around it, that causes the controversy,” she says.

 

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To avoid problems, consider taking the following five steps:

 

 

Parents who create a mechanism for disposing of keepsakes go a long way to prevent conflict later, says Malcolm Greenhill, a certified financial planner and president of Sterling Futures in San Francisco.

 

“The parent has to take responsibility and realize there’s a very high likelihood of arguments and disputes. There’s something about death that polarizes — it either brings families together or splits them apart,” he says.

 

He described a situation where parents left a treasured vacation home to their children to share. One sibling in need of cash wanted to sell the property; the others wanted to keep it. The dispute resulted in professional mediation.

 

To avoid that situation, the parents should have talked with their children individually and as a group, Greenhill says. “You sort this all out beforehand and then you make it public. ‘This is what we’re going to do and here are the reasons for it.’”

 

Andrea Coombes Read More
MarketWatch
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