8/20/2012 2:15 PM ET|
How to avoid fights over Mom's stuff
When a parent dies and the children are faced with dividing up the possessions, things can get ugly. But by taking certain steps, the survivors can avoid family warfare.
Most people who die leave behind stuff. And many, if not most, families wind up fighting over that stuff.
Julie Hall, otherwise known as "the Estate Lady," says sibling battles over parental possessions have broken out in more than 80% of the estates she has liquidated.
"People will tell me, 'Oh, that will never happen in our family. Our children are so close, there aren't going to be any problems,'" said Hall, who blogs at The Estate Lady Speaks and has written several books on clearing out an estate, including "How to Divide Your Family's Estate and Heirlooms Peacefully & Sensibly." "I smile and say, 'That's so nice,' but I know that after (the person dies) they will fight over the craziest things."
I would love to say our family didn't join those ranks when my father died two years ago. But one of the few things I wanted from Dad's estate -- the military medals of his brother, who was killed in action in Korea -- was something my brother wanted as well.
We wound up dividing them, but there was a pretty fierce tug of war there for a while. And that's too bad, because the last thing our parents would have wanted is for us to fight over stuff.
"Post-death family feuds are terrible," said Los Angeles estate planning attorney Jon Gallo, who with his psychotherapist wife, Elaine Gallo, runs Gallo Consulting to help families navigate this rocky terrain. Such battles can make a traumatic time even more stressful, he said, even leading to lifelong rifts.
Things can really get ugly if parents treat children unequally, Gallo said, or if a particular item stirs strong emotions for more than one person.
"Usually it's something that's a reminder of their childhood," said Jon Gallo, who has co-authored several books with his wife, including "Silver Spoon Kids" and "The Financially Intelligent Parent." "There's a deep psychological connection."
Pretty soon, siblings descend into the "Mom always liked you best!" or "You always got your way!" squabbles that punctuated their childhoods. Maturity, reasonableness and rationality can fly out the window. In the worst situations, siblings may steal items from the estate or bully another heir into giving up a cherished item, causing hard feelings all around.
There are some ways, however, that may head off warfare within the family:
1. Get the parents to decide.
In an ideal world, Hall said, the parents would decide who gets what in a financially equitable way. The kids may not like the parents' decisions, but they're more likely to accept them -- and less likely to end up hating each other -- if they don't have to work out a distribution plan themselves, she said.
Hall is a big fan of parents asking their kids in advance what items they might want -- with no guarantees that asking means getting. Items of value should be appraised, and then the parents can draw up a list that ensures each sibling receives roughly the same dollar value of stuff.
If parents do treat children unequally, they'd be smart to leave behind a written or videotaped explanation of why, Gallo said.
"We encourage people to talk to their kids as well, but . . . people hear what they want to hear," said Gallo, who offers to record on video special interviews with clients so their heirs can better understand their wishes. The videos can be played after death so there's no question about what the parents wanted.
"The parents can say, 'George, we know you wanted the such and such, but we've decided to give it to Mary. She didn't influence our decision in any way, and we want you to know that and accept our decision," Gallo said. "Or 'Pete, we've helped you out in the past, and now we're giving more to Paul because he has health problems.'"
2. If the parents do leave it up to the kids to divide the stuff, there should be a stick along with all the carrots.
For example, the parents could state in their wills that if the kids are in charge of dividing up the household goods but can't agree on who should get an item, that item is given to charity, Gallo said.
Or it could be sold. "If everybody wants the grandfather clock, sell it and divide the proceeds," Hall counseled.
Some people are shocked at the idea of selling a family heirloom, Hall said, but she points out that such heirlooms can cause generation upon generation of trouble.
"When that person (who got the clock) dies, then there's a whole new uproar over who will get it and how it wasn't fair she got it in the first place," Hall said. "Get rid of it, split the money."
3. In the absence of parental guidance, the kids can make a pact to keep the peace.
Start with the idea that your folks (probably) wouldn't have wanted you to come to blows over stuff. Talk about this with your sibs. Focus on honoring your parents' memories and respecting each others' feelings, rather than just getting what you want out of the deal.
If you hit a sticking point, consider the option of donating the item to charity or selling it to split the proceeds. Other methods that can be used include:
- Drawing straws, with the short straw picking first and the others going next in order of straw size. (Dice or playing cards can also be used to select who goes first, who goes next and so on.)
- Using birth order, with the oldest choosing first and the youngest choosing last in the first round. Then the youngest goes first, followed by the next oldest and so on.
- Conducting auctions where everyone gets an equal amount of play money and can bid on the items he or she wants most.
- Selling everything, then dividing the proceeds.
- Conducting auctions with family members using their own money to buy what they want, then everyone splits the proceeds equally.
Before you choose a method, though, think hard about how well it's likely to work with your family. Hall believes each method can cause problems and lingering resentments, but she prefers the last option when parents haven't been clear about their wishes, because it's the method least likely to cause later recriminations.
4. The in-laws and grandkids need to stay out of it.
This process is hard enough without spouses of siblings sticking their oars in. Maybe you felt exceptionally close to your mother-in-law or father-in-law and feel obligated to let everyone know what they would have wanted. Please, resist the urge to share. The best thing you can do for your spouse and your family is to support the family pact of peace. On every other topic, keep your mouth shut.
Dragging in the wants or needs of the grandkids is also likely to muddy the water. Otherwise reasonable people can go nuts when they think they're defending, or providing for, their kids.
If you're tempted to get all misty-eyed about passing things down to your children, understand that they probably aren't nearly as sentimental as you are. If there's an item you're willing to fight your siblings over, picture it on a yard sale table with a $5 tag attached -- because that may well be where it winds up eventually.
"The younger generation wants the cash," Hall said. "All the things that meant so much to you are going to be hastily taken care of when you're gone."
Liz Weston is the Web's most-read personal-finance writer. She is the author of several books, most recently "The 10 Commandments of Money: Survive and Thrive in the New Economy" (find it on Bing). Weston's award-winning columns appear every Monday and Thursday, exclusively on MSN Money. Join the conversation and send in your financial questions on Liz Weston's Facebook fan page.
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And when inheritance money get serious -- for example an inheritance in trust, in the millions -- then you frequently see siblings suing for more, arguing about who get what, sometimes a trustee even seems to involved when a family member can't get his or her calls returned... can't get their paperwork. They ask me "why?". Well, why else! Hard to believe but there it is right in front of you and your client is in danger of losing everything to the greed of others in their family.
But even if Ms. Gallo can solve many inheritance problems, there are often times when a family is getting along and the problem turns out to simply be poor cash flow as probate slowly grinds along until it closes, 9, 10, 12 months or longer... or a trust will not reach final distribution for a year or two or three. And the heir, or beneficiary, has to wait to access anything. This is when something called a probate loan, or a trust advance -- an inheritance financial solution often called an estate loan or inheritance loan -- comes in handy.
I can mention a few URLs, for a trusted, reputable firm that charges nothing up front, has no compounding interest or monthly payments -- the fee comes out of your inheritance at the end of the probate or trust process. No hidden fees or any of that nonsense. A+ rated by the Better Business Bureau, in biz for 20+ years -- the kind of company I want to deal with when I have one shot at a free windfall, so to speak: www.InheritanceAdvance.com, or www.InheritanceNow.com, or www.HeirAdvance.com (probably the most well known and oldest of the three, based in Southern California).
Best part -- if you are having some problems with siblings or family members, they don't have to know you're borrowing from yourself, liquidating a portion your future inheritance to improve the present. And let's face it, a lot of folks are having trouble with cash flow these days... so it's always good to have access to cash when you need it. An inheritance really is a blessing, isn't it? So do good things with it, and listen to good advice!
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