The biggest problem with estate plans isn’t the legal and financial framework chosen to execute parents’ wishes, but family emotional issues that disrupt a rational plan of asset distribution.
Parents or their attorneys don’t always anticipate the ramifications of future family conflicts in administering the estate. Here are some typical patterns.
In about one-half of estate plans, no family conflict occurs. Family relationships are based on love, good communications, mutual respect and trust. Parents have a good understanding of family dynamics to create a plan that is fair and acceptable to all parties concerned.
When there is some family conflict, a sizeable proportion of families struggle with one or two tough issues and resolve them satisfactorily through communication. The estate plan may not have anticipated these issues, but siblings have enough goodwill and communication skill to work through it.
When there is some family conflict, a sizeable proportion of families struggle with one or two tough issues and resolve them satisfactorily through communication. The estate plan may not have anticipated these issues, but siblings have enough goodwill and communication skill to work through it.
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In about 20 percent of estate plans, family members are hurt by the conflict surrounding caregiving, housing or inheritance. They are offended by the process, the influence of siblings, or the inequalities of asset distribution.
A poorly executed estate plan adds to pre-existing rivalries. Although not litigious, the conflict results in more strained relationships, withdrawal or avoidance between families.
Another subset of family members disturbed either by the estate plan or sibling behavior lash out to correct problems as they perceive them. These families are embroiled in litigation or the threat of litigation, guardianship or will contests, and exchange hurtful, vitriolic bitterness. Permanent family rupture is the result.
There will be an occasional family member who will fight and react negatively in even the best estate plans. Not every situation is preventable.
Big mistakes can create family conflict. A family member is chosen and put into a position of trust. This could be a family caregiver, executor, trustee, guardian or personal representative who has access to the parents assets through joint checking accounts , power of attorney, undo influence, or joint tenancy.
This family member may be tempted to exploit their position by the opportunity for financial gain, lack of financial audits or controls, problems in his or her life, and an ability to rationalize behavior. This person may be the trusted son, the Johnny-come-lately caregiver, or the favored daughter.
This family member may collude with siblings to exploit the parents’ assets, invest to one’s own benefit or collude with an attorney to maximize their own inheritance. The right of survivorship puts the widowed parent in control. The family dynamics surrounding the surviving parent are different.
Appointing the oldest or most trusted child in the family to execute the estate may appear to be a solution. However this can cause family rifts. This good child may alienate less impartial siblings and be the recipient of their anger at the parents’ estate plan or out of their past resentments.
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Being the executor is a thankless job and deserves compensation, something siblings may not agree on.
Parents may consider putting a trusted friend or a commercial trustee/executor in charge of managing the estate. Also they may consider a second signature by a non-family member on family accounts and have an annual accounting made for expenditures and investments.
Sentimental keepsakes and valued family possessions can be a source of family conflict.
Don’t put competing parties coveting the same item in charge of dividing possessions. Some things can’t be divided and retain their value. Give it away or sell it and divide the cash.
Telling your children about the details of the estate plan may cause anger and resentment toward the parents and subject them to undo pressure or emotional blackmail. By not sharing enough, either prior to death or in the will itself, basic unfairness may go forward uncorrected and/or siblings will imagine that the parents were subject to undo influence.
Most children will accept their parents’ wishes if they know the process by which they came to their decisions was fair. If the process is unclear or subject to suspicion, hard feelings are more likely.
