Question: You often write about how family members change in relationship to others after Mom or Dad has passed away. I was always pretty sure my kids would be fine after we are gone but, we recently settled my sister’s estate, and I am amazed at how her kids fought! Two of them are still not speaking. I did not see this coming so now I am wondering about my own kids. How can we “stress test” our kids to be sure that things will go smoothly in the division of our estate after we are gone?
Answer: “Say not you know another entirely till you have divided an inheritance with him.” This is a great quote by Johan Kaspar Lavater who lived in the 1800s. As you can see, things have not changed much in the estate settlement arena in 200 years!
It is difficult to say why the combination of losing a loved one and a possible inheritance can bring out the worst in some people, but it does. Estate lawyers are very familiar with the weird phenomenon that takes place when the patriarch or matriarch of the family either dies or becomes incapable of heading the family and controlling assets. Sons, daughters and even grandchildren may jockey for position in the family hierarchy. Many potential heirs seek, sometimes aggressively, to rectify age-old grudges – now that the family governance is dissolving or destabilized.
Industries have sprung up to help families avoid the emotional and financial damage that can occur or to help heal the sometimes irreparable damage that can happen at the death of parents. If you anticipate a power struggle among heirs and can plan accordingly, the outcome should be optimal. But, as I said, it will take proactive planning on your part. Further, significant estates that include family businesses require preparing heirs not only for the receipt of wealth, but also for their leadership roles in perpetrating the continued success of the business.
If the death or incapacity comes unexpectedly or if the current family leadership is “old-school” and believes that the children and grandchildren will work it out, prior planning does not get accomplished and it can become survival of the fittest.
Survival of the fittest in these cases, however, usually means survival of the one that has the most money to hire a great team of lawyers. The outcome could be one of several: after numerous court hearings and tens of thousands in legal fees, a judge will usually order the family to mediate or arbitrate with the hope that family members will reach common ground. While mediation or arbitration is frequently helpful, by this point much emotional and financial damage will have been done. Some families, like your sister’s, may never fully recover.
You can “stress-test” your children by having them go through a guided mediation process now which should help surface any inheritance issues. Once issues are recognized, a mediator can help your family find peaceful resolutions. The hope is this will preserve harmony at home, along with a great deal of lawyer’s fees and court costs. To find a mediator in our area, check with the Mandell Gisnet Center – (831) 582-5234 or online at www.mandellgisnetcenter.org.
Liza Horvath has over 30 years experience in the estate planning and trust fields and is the president of Monterey Trust Management, a financial and trust Management Company. This is not intended to be legal or tax advice. If you have questions call (831)646-5262 or email liza@montereytrust.com
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Liza Horvath, Senior Advocate: Stress testing a family inheritance - Monterey Herald
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