The challenges of maintaining family relationships are that much greater when money is involved. Added stress is present when blended families can’t trust one another and don’t get along. You might be surprised at the amount of money that can cause arguments. It doesn’t have to be a fortune—deep-seated feelings of rivalry and jealously are, in many instances, at the root of the problem. With that in mind, let’s look at four ideas to consider in an attempt to avoid a battle royal over your assets:
- Irrevocable Trusts. When the parents are both alive, they can consider a trust. Irrevocable trusts can’t be modified by the children or even the surviving spouse. They will protect the aging parents from themselves. They also can let the children know that other beneficiaries can’t inflict undue influence.
- Preplanning. Don’t force family members to make financial decisions during a family crisis. Consult with an estate planning attorney to talk about how to best address your specific situation.
- Hire a Corporate Trustee. This can alleviate the scenario of children being pitted against one another. A trustee can be appointed to be responsible for administration. If you name one family member as a trustee for the other family member, it places the family in a precarious situation if there’s a disagreement about how the trustee is managing the trust. A corporate trustee can manage investment accounts, businesses, farms, and real estate. The costs of a trust company might be a small price to pay for keeping peace in the family.
- Have a Family Conference. The family should meet, especially if the parents decide that “fair doesn’t mean equal.” It’s hard to explain how and why an estate will be distributed in a will or a trust. A face-to-face discussion is the best way to address any issues. A family meeting to talk about estate planning, with an experienced estate planning attorney to lead the process, can help keep peace in the family.
Reference: Motley Fool (November 7, 2016) “Avoid family fights over inheritance”