Death & Disputes
“Never say you know a man until you have divided an inheritance with him.” – Johann Kaspar Lavater
We all know a family that clashed after the death of a loved one. For those uncomfortable with emotions of sadness, fear and grief, anger seems like a safe haven. But these feelings can escalate and result in long-term feuds, especially when the estate of the deceased has not been left in order. Typically, these disputes are over tangible personal property and family business interests. However, harmony can be preserved with proper planning and communication.
Tangible Personal Property
Real estate and other investments may come to mind when considering the cause of family unrest. However, cash, antiques and heirloom jewelry top the list of items that fan the flames of many disagreements. The items in question don’t even have to be valuable. Sentimental trinkets can cause just as much, if not more, tension. Fortunately, the laws of most states provide a flexible solution for the specific distribution of tangible personal property.
As part of your estate planning, find out whether your state authorizes a separate writing on which you may list the specific items and who is to receive them. In most instances, this may be handwritten, but it must be signed and incorporated by reference within the estate planning legal documents. Time spent preparing this writing now as part of your overall planning can help thwart problems later.
Family Business Interests
Ninety percent of U.S. businesses are family-owned or family-controlled, yet only one-third survive their founders. Federal estate taxes are one reason for this dismal survival record, but family feuds are also to blame. By carefully coordinating your personal estate and business succession planning, these issues can be resolved before they arise.
For example, will your surviving spouse continue the business or sell it? Who will buy it? If your children take over, will they buy or inherit the business? If they inherit it, how will the inheritance of other children be equalized? Are there any in-laws who might stir up trouble?
These questions may seem overwhelming, but all the more reason to plan ahead. As the proverb says, “He who fails to plan, plans to fail.” And what fails may well be the family business.
For many people, the subject of death is not easy to discuss. If you are planning your estate, broach the topic with your heirs. A recent survey, conducted by the AARP/Scudder Investment Program, found that the majority of respondents who reported no conflicts over an inheritance had known what to expect and believed their inheritance was fair.
If your affairs are settled but your parents still haven’t considered their estate, perhaps a gentle reminder is in order. Show them this newsletter. Many times people think they don’t have much of value and therefore don’t anticipate the tension they will leave behind. But history has shown that even inexpensive baubles and the smallest inequities can result in family disputes.