Preventing Family Conflict Over Inheritance

Sometimes when a parent passes away, his children fight over the assets the parent has left behind. For example, I have some personal experience with this. My grandparents lived in Davis, California and were both lifetime cigarette smokers. At the tail end of their golden years, my grandparents developed lung cancer and passed away after a long, lingering and ultimately unsuccessful battle with the disease.

My aunt, who lived across town from my grandparents, took responsibility for caring for then during their dying process. She paid their bills, managed their care givers, visited them and made sure their house was in good repair. When they finally passed on, my aunt made much of the funeral arrangements as well.

Being that she lived in the same town as my grandparents, by default she was responsible for taking care of their assets, including the house. Unfortunately, my aunt was cheated by the contractor who was hired to renovate the house and get it ready to be sold and ultimately she had to sue the contractor.

The lawsuit ignited a number of long simmering disagreements between my aunt, my mother and my uncle. Unhappy with how things were being handled by my aunt, my mother and uncle drove to Davis to “get things moving”. This ment withdrawing the lawsuit, seizing control of the house and finally putting it on the market. This has complicated their already precarious relationship and now all three of them are hardly on speaking terms.

Now, what are the implications of this for personal finance? Generally speaking finance related conflict between siblings surrounding the death of parents is about much more than the actual money itself. It likely involves a complicated set of psychological factors related to history of the family. However, regardless of the deeper reasons for fighting, two things are clear.

1) An independent executor of the will should be established. This should be someone who is NOT a member of the family. Ideally a trusted attorney should fulfill this role.

Why someone independent? Because, the experience of death and disposing of assets leaves many with judgment subject to the whims of emotion. Also an independent executor can act as a scapegoat in case something goes amiss. For example, my family’s case, an independent executor would have allowed my family to direct their disagreement toward someone other than each other.

2) A will should be established before the death of the parent. This should spell out precisely what the parent’s wishes are prior to the parents death. The executor should merely execute the parent’s wishes as stated in the will. The worst thing that can happen after the passing of a loved one is a long, drawn-out fight over who gets what part of their wealth.

Not effectively planning to manage inheritance disbursement simply leaves too much potential for trouble.

Best,

James