Divvying things up: What to consider
• Talk to parents ahead of time about their plans, including finances and other important issues the family should know about.
• Ideally, one sibling should be in charge or serve as the executor after death, keeping everyone else informed.
• Siblings need to understand that the role of executor should not automatically go to the oldest child; it's about the best person to do the job. It's often easier if the person resides in the state where the parents live.
• Consider the next generation, potentially leaving something for the grandchildren, depending on the siblings’ present situation.
• Don't divide an indivisible asset to bring siblings together. Find a way to make up the difference with money or other assets.
• Take the time to reconcile and forgive before it's too late.
• It always comes down to communication and being fair. Be as equitable as you possibly can. If not, you are asking for trouble for the next generation.
Lee Hausner is a Los Angeles–based psychologist and author ofChildren of Paradise: Successful Parenting for Prosperous Families,an instructional book about handling family assets. She recalled a situation where clients wanted her help distributing ownership of the thriving family business. During the discussion, she watched a physical fight break out between siblings about their mom's foot stool.
"Parents should never divide an indivisible asset in hopes that it will bring their heirs together,” Hausner cautions. “Give the house, the land or the business to just one child and make up the difference with a monetary share for the others. Alternatively, stipulate that the asset be sold and the proceeds divided evenly. That way, the one who really wants the asset can buy the others out.”
Dealing with extended family
As part of a blended family, Sheryl Richter had siblings and half siblings spanning 22 years, along with a few ex-stepmoms. Her father had done well in life, and his motto was always “One family.” When he fell sick in his 80s, he began to look at his estate from the perspective of considering who could best manage it. He continually shifted the executor role based on that week's sentiments. “It became his last act as a patriarch and a way to exercise control,” says Richter, who ultimately took a leadership role in bringing consensus.
"There was a decent amount of money at stake,” she says, “and it would have been easy for each of us to play off one another. Luckily, we went into the process affirming our commitment to remain connected as a family. Opinions from ex-wives and spouses definitely complicated things, but in the end we all agreed to stick to the rules."
Health & Wellness
AARP® Dental Insurance Plan administered by Delta Dental Insurance Company
Dental insurance plans for members and their families
See more Health & Wellness offers >
Even in relatively uncontentious situations, in-laws are often considered outlaws. “Spouses change the equation when dealing with trust and estate issues, especially if they are whispering in the ear,” Hausner says. “If you've had clear conversations about the plan, it's harder for someone to try to do a grab. Typically, spouses need to hold their words unless there is something absolutely horrible going on."
Obviously, the entire process of dividing an estate is made easier if parents have enough money to support themselves. It's when the children are supporting the parents in unequal ways that serious tensions can arise around estate decisions.
You've tapped into my wheelhouse! Let's dive into the intricacies of estate planning and the division of assets among siblings.
Firstly, the advice to engage in proactive communication with parents is solid gold. It's the foundation of a smooth estate transition. Financial discussions and understanding the parents' plans are crucial. The emphasis on having someone local as the executor is a practical gem. Being in the same state simplifies the process and avoids unnecessary complications.
Now, the notion that the executor role shouldn't default to the eldest sibling is spot-on. It's about competence and suitability, not birth order. Lee Hausner's anecdote about a physical fight over a footstool serves as a stark reminder: indivisible assets can tear families apart. The recommendation to either allocate the asset to one heir with compensation for others or sell and distribute the proceeds evenly is sage advice.
Consideration for the next generation is a forward-thinking approach. Planning for grandchildren based on the siblings' present situations adds a layer of strategic thinking to the process. It's an investment in the family's future harmony.
The personal story from Sheryl Richter highlights the complexity of blended families. The ever-shifting executor role based on the father's sentiments showcases the human aspect of estate planning. Maintaining family connection amidst financial stakes is commendable and echoes the importance of clear communication and commitment.
The mention of in-laws as potential disruptors underscores the need for transparency. Clear conversations and well-defined plans act as safeguards against unwarranted interference. The dynamics change when spouses get involved, and establishing boundaries through open dialogue is crucial.
Lastly, the acknowledgment that financial disparities among siblings supporting parents can be a breeding ground for tensions is astute. It emphasizes the importance of fairness in the distribution process.
In essence, successful estate planning boils down to proactive communication, fairness, and a forward-thinking mindset. The insights provided align perfectly with these principles, setting the stage for a harmonious transition of family assets.
