If you have two or more children, chances are you spent a good portion of their early years trying to keep the peace between them. Though they usually grow out of creating bitter spats out of thin air, even adult siblings will find a reason to go head to head from time to time.
Unsurprisingly, money plays a huge role in instigating such conflicts—an inheritance most of all. You need to address these problems in advance because, well, if your children are set to inherit your estate, you are not going to be there to sort things out. In my years as an estate planning attorney, the experience of working with parents to safeguard their family harmony has given me ten essentials for nipping conflict in the bud.
Talk to children about your estate plan
Neither you nor they will be particularly eager to discuss matters of mortality, but this is the necessary foundation of an agreeable plan—without it, you will never know of any contentious points until it is too late. Consider inviting your estate planning attorney to be by your side as you do this. They’ll have your back and be able to answer the more complicated questions with ease.
Write your children a letter
A face-to-face discussion is not for everyone. The stress involved can be somewhat alleviated by choosing instead to rely on the exchange of letters or emails. This allows you to give exactly as much detail as you are comfortable with, and provides more time to think. Try first putting it to your children in general terms with a request for their input—this may get you a better idea of their expectations.
Email your children your estate plan summary.
Typically, a summary of your estate plan, minus the specific dollar amounts, will be given to you by your estate planning attorney. Be sure to ask them for a copy you can provide to your children—this can be a great way to get more detailed input from them.
For complex estates, consider a mediator.
If your estate is a large one, full of a variety of different components—a family business, an art collection, etc.—it would be best to turn to a professional mediator. The mediator will sit down with each of your children individually to work out what they expect to receive and whether one child’s desires will conflict with another’s. Afterward, you all meet together smooth over any disagreements.
Use equal treatment
Unsurprisingly, a plan that distributes your estate to your children equally is least likely to elicit jealousies and anger. However, this can be difficult with items not easily assigned a dollar value—some particular item may mean the world to one child, but be worthless to the rest. Furthermore, if your children are of widely varying means, you may wish to consider a progressive distribution (distributing more to those with less). Just be sure to talk it over first!
If you establish a trust for children, name each child as a co-trustee of their own trust at a certain age
Many peoples’ children are nothing alike. What may be a reasonable age for one child to begin to participate in managing their own trust alongside the main trustee is not necessarily the same as their sibling.
Consider staggered distributions from a trust
Particularly as a young adult, your child will still need to acquire the skills of managing their finances responsibly. A sizeable inheritance will complicate this. Your best option is to space out distributions over a period of time—say, age 25, 30, etc.
Provide children with option to remove or replace main trustee
There’s a good reason arranged marriages are long out of style in America: whether the two individuals will form a positive relationship with one another is largely unknowable. It is odd to think of it this way, but the same goes for your children and the trustees you assign to them. While you do not want to simply allow your child to rid themselves of a trustee who refuses to cater to their every whim, the limited power to replace the trustee with another qualified individual can make a real difference in your child’s quality of life.
Allow children to name their own co-trustee
If your children are already capable of handling things largely on their own, consider granting them the power to designate a co-trustee to work out the more complicated aspects of the trust.
Include mediation instructions in your estate plan
Toss out any ideas daytime TV may have given you about courtroom battles. The truth is that litigation is enormously draining, affecting both your children’s emotional health and their finances.
What you can do
Just by reading this list, you have started yourself on a journey to the perfect estate plan. Remember, the most invaluable resource for estate planning is an estate planning attorney—that’s why we offer our renowned Family Wealth Planning Sessions. The session will enable you to identify your best options for protecting the financial security and emotional wellbeing of your loved ones.
Contact us today to schedule your free Family Wealth Planning Session. Give us a call at 612-206-3701 or reach out via our online contact form. I look forward to hearing from you.
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