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Question:

I recall two incidents when I was with a CPA firm: the firm’s clients (parents, probably in their 70s) were sued by their adult children over the client’s estate (children’s future inheritance). Another client sued her brother for the family business. She claimed that her brother was inappropriately controlling the company after their dad died. In both cases, it was uncomfortable to witness families fighting over money. I’m curious to learn more about what we planners can do to help our clients mitigate potential family conflicts.

Response:

Some conflicts can’t be avoided because they are the result of years or decades of issues within families. But the best approach is transparency. The parents need to be clear about their goals and what decisions they are making so there’s no question about their intent or reasons.

This can, of course, create discomfort for them that they would prefer to avoid. For instance, if they give more during their lives or in their estate plan to one child over another for whatever reason — need, the care and attention that child provided them, or disapproval of another child’s life choices — if they explain their decision, it’s somewhat more likely that they will incur a child’s wrath, but that the siblings will continue to get along.

At least this approach should avoid the litigation you are describing since in the United States the right to do what one wants with one’s property is sacrosanct. It’s hard to argue undue influence or incapacity if the parents communicate their decisions clearly.

If they really want to avoid the family conflicts that may result if they communicate their decisions during life, the alternative is to write a letter explaining them to be delivered after they pass away.

Of course, another way to avoid difficulties is to treat every child equally, especially in terms of divvying up the estate. We have had many clients who help out some of their children more than others during their lives, usually based on need, but who divide their estates equally no matter the different levels of need or devotion of their children. This is because such inheritances can often feel less about money and more expressions of love.

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