Family is one of your most valuable assets. Transmission of wealth through your estate plan communicates many things to those you leave behind. It carries additional weight because it is your final statement. Through planning you communicate your interest in the ongoing lives of your loved ones.
Anticipating and avoiding conflict in estate planning is important. For some families the settling of an estate leads to estrangement or hard feelings between siblings and their descendants that can last for generations. Long submerged sibling rivalries can come to the surface after a parent’s death. Even in the best of families, children facing the death of their last surviving parent may become possessive, greedy and argumentative.
Most parents do not want their last wishes as set forth in a Will or trust to drive a wedge between their surviving children. However, in spite of the parent’s best intentions, conflict between their children may result when an estate is settled.
Should a parent treat their children differently in their estate planning documents? Sometimes there are good reasons to do so. One child may have achieved great financial success or married a wealthy spouse while another works long hours in a low-paid but socially useful profession like teaching or social work. Another child may have limited opportunities due to an accidental injury or disability. One child may have borrowed money from the parents and never repaid the loans. One child may have provided uncompensated care-giving in the parent’s final years.
Do these differences in children’s circumstances, needs and behavior justify leaving more to one child and less to another? Only the parent can decide.
If you decide on unequal treatment for your children, these suggestions may help limit any resulting hard feelings:
- Communicate about what you are considering while you are able to have a thoughtful discussion with your children. Share your decisions and your reasoning. If there are misunderstandings or hurt feelings from the past, get it cleared it up while you are still able to make changes to your plan.
- While it may be tempting to do so, don’t use estate planning decisions to punish a child whose choices you disapprove of. Keep the big picture in mind.
- Include a provision in your Will or trust that explains your decisions if you are not treating your children equally. The Will can speak for you after death, but this should not be a substitute for having what may be difficult conversations while you are living.
- If a child has a tendency to overspend, put that child’s share in trust or give them an annuity that pays out over time. You can give that child less liquid assets, like a share of the family home or personal property.
- If there are unpaid loans from parent to child, explain and address that in the Will. Whether the loans are to be forgiven at death or the debtor child’s share of the estate reduced to adjust for the loans, make sure your intentions are clearly stated.
- Rather than choosing one child as Executor of your Will, consider using a bank or trust company as Executor if you anticipate conflict between your children. The officer from the bank or trust company can administer the estate professionally and impartially and not be drawn into intra-family conflicts.
- Include a provision in your Will or trust requiring mediation rather than litigation over any conflicts that erupt during the estate administration process. This can help resolve problems in a less hurtful and less expensive manner.
Talk to an attorney whose focus is estate planning about how you can protect your estate and your descendants from damaging conflicts that can erupt between siblings after the parent’s death.