Death and money details
Will may not be enough to avoid a family divide
“Money can be a sensitive topic. When you add the complications of family relationships, it’s easy for issues to arise.”
— Aliyyah Camp, publisher at the financial comparison site Finder
Before Mara Markzon’s grandmother died, she clearly and evenly divided her assets in her will.
But Markzon’s grandmother neglected to detail where some of her personal possessions — her books, her costume jewelry, her purses — should go. An argument about those sentimental items ensued, permanently dividing the family, said Markzon, a social worker in Chicago.
“Even in the best of situations, the death brings up emotions even if there aren’t problems going into the situation,” Markzon said.
Even with a will, emotions run high when a family member has just died and there is money to distribute. Now you’re combining two things that people have high emotional reactions to as part of life: death and money, said Kelley Scrocca, an estate planning attorney for Swier Law Firm, who recently worked in Illinois but now works remotely from Germany.
Nearly half of planning professionals agree that the No. 1 threat to estate planning is family conflict, according to a 2018 poll by TD Wealth.
A big part of the problem is lack of communication. Only 21% of people tell their family members what to expect in the will, leading to confusion. And most people expect to inherit more than $100,000, but receive less than that, according to Ameriprise Financial.
“Money can be a sensitive topic,” said Aliyyah Camp, publisher at the financial comparison site Finder. “When you add the complications of family relationships, it’s easy for issues to arise.”
One side of the family may think they’re owed more because they paid for their mother’s phone bill over the past few years, while the other side may say that they were promised a clock, but it wasn’t written in the will, said Scrocca, who described the estate planning profession as 60% law and 40% therapy.
Scrocca said she’s seen families ruin their relationships over $5,000. She’s also seen parents leave one child money with the understanding that that child would take care of the other siblings with special needs, but that money was quickly gambled away or taken by creditors.
“I’ve seen a sibling be named ‘executor,’ and then essentially squat in the house, not paying taxes or keeping it up, meanwhile the other siblings are stuck having to go to court to try to get the house sold so they can get their inheritance,” Scrocca said.
Camp said the best way to avoid inheritance arguments is to hold a meeting with the people affected by it. Whenever you make adjustments to the will, meet with everyone again, she said.
“It may be uncomfortable to discuss your will so early, but it’s better than leaving your loved ones confused or in disagreement later on,” she said.
When discussing the will, the distribution of money can be a touchy subject, especially if one person needs it more than the other.
Shlomo Slatkin, a licensed clinical professional counselor and a certified imago relationship therapist, suggested giving all children equal portions of the will, even if one child is in deeper financial need.
“Troubles happen when the distribution is imbalanced, or one person is written out of the will,” Slatkin said.
If a client decides to leave a child a greater percentage of the estate than the other child, it’s recommended that the client share this information soon after signing the documents, said Deborah Danger, a Massachusetts attorney.
Full disclosure creates an opportunity for children to ask the parent direct questions about his or her decision and “acknowledge hurt feelings and aid with the expression of anger in a controlled setting,” Danger said.
If the person has already passed away or lost capacity and there are questions or concerns about the will, then Danger suggests contacting the creator of the document if possible (in most cases, this would be the estate planner).
For example, she had a client with a multimillion dollar estate and four children. He left the estate to the son and daughter who lived near him, while the other two children were made the beneficiaries of his $1 million life insurance policy. This created resentment.
“I had permission to explain that their dad was grateful for the care that the two local kids provided, including allowing him to frequently interact with his grandchildren,” Danger said. “My client loved the kids who lived farther away just as much, but was hurt by what he perceived as disinterest from the two nonlocal kids.”
While everyone involved said they wished these feelings were made known before he died, understanding his rationale made it easier for them to accept their father’s wishes without holding it against each other.
But even in the most amicable of families, and even with the most open communication, disagreements can still occur. That’s why proper estate planning instruments need to be in place, said Robert Drury, executive director of the Association of Christian Financial Advisors.
First, everyone should have a will, which is the most basic estate planning tool, Drury said. If you don’t have one in advance of death or an accident in which you lose capacity, intestacy laws of the state where the person who died lived will determine how the estate is distributed.
“Therefore, two things are important: that the terms of the will accurately state the decedent’s wishes, and that as many assets as possible be contained or disposed of using instruments that bypass probate and are not subject to court interpretation,” Drury said. These include living wills, trusts, insurance products, retirement plans and deposit accounts assigning rights of survivorship.
“No matter how badly the familial situation breaks down, these instruments are immune to the fight,” Drury said.