The holidays are upon us. It's the time of the year when family moves from the shadows of a busy life to the foreground. That probably makes it as good a time as any to consider one of the most difficult topics to discuss pertaining to family and finances — the subject of inheritances. Nobody wants to talk about it because it is inextricably linked with, well, death. Someone has to die for an inheritance to come about, and none of us enjoys looking a loved one in the eye and saying, “Hey loved one, you are going to go the way of all flesh soon, so can we talk about what you are going to leave behind?”
How family disputes over inheritances arise
When a dispute arises over an inheritance, it can help to recognize some of the issues that might be contributing to the problem developing between family members — and there are a number of things to consider:
1. It's all about stuff: A rich person, according to the story, was being buried one day. At the graveside, two employees were musing over how much the curmudgeon left behind. A third joined the conversation. “How much do you think old Scrooge left behind?” one asked.
“Everything,” replied the newcomer.
It is true: We can take none of our stuff with us when the day comes that we, too, go the way of all flesh. Therefore, a will inevitably is about stuff (including money). In a family, when the parent is gone, their affection (or lack of it) is gone, their words and actions are gone … all that remains is some stuff they left behind.
2. The thought process: Soap operas are built around the conflicts arising from inheritances (of stuff). We have all seen the media headlines about bratty heirs contesting the will of a wealthy parent. But it's not just the wealthy who spar over these things — many permanent family rifts are caused by siblings arguing over who should have received what.
About the only thing my wife had her eye on when her mother passed away was one of those ancient, dusty sets of Encyclopedia Britannica, one where the latest miracle discovery seemed to be the light bulb. It is a lovely antique, makes a bookshelf look really classy … but is otherwise useless in every other way. Still, it's what she wanted and, when that set showed up on her brother's bookshelf, well, let's just say that it took a few years for that sense of unfairness to heal. The funny thing is that neither of us would have ever cracked the pages of that musty set — and nor did her brother. It was, quite simply, the thought of it.
And that is one of the core problems with inheritances: “the thought of it.” When those kinds of thoughts begin involving money, or things with tangible value, conflict seemingly always follows.
3. Expectations about what is deserved: At the root of all this conflict is expectations. Heirs build up expectations as to what they think they ought to be receiving; and when another heir expects the same, there is conflict.
The human mind has this incredible ability to persuade itself that it deserves something it gets for free. Athletes and actors can look you straight in the eye and tell you they actually deserve $10 million a year because they work hard, while a guy digging ditches makes minimum wage and struggles to get a job for a full 40 hours every week. Even lottery winners often persuade themselves that they really deserved that $300 million jackpot.
Heirs that quarrel over an inheritance are not much different. Almost every heir proves to be quite adept at explaining why they deserve what they think should be theirs. However, the fact of the matter is that heirs do nothing to deserve what they are about to receive. Their parents (or other relatives) did all the hard work, made all the right decisions and endured the frugality it took to actually have something to leave behind.
4. Surrogate appreciation: Every child has a need to feel appreciated, even when they are in their 40s or 50s. Actions, as we know, speak louder than words, and many kids look at the provisions of a will as the final expression of appreciation by the parent or whoever is leaving the stuff. Therefore, heirs read more into the provisions of a will than simply the allocation of the stuff.
When heirs read more into the provisions of a will than simply how much free stuff they receive, expectations tend to become magnified and lead to conflicts.
5. General temperaments: My mother passed away from cancer about two years ago, leaving everything to my half-sister and myself. My sister is outgoing-bold and had no problem discussing the provisions of the will with my mother. (“Hey, Mom, you're going to kick the bucket soon — so what's in the will?”) I, on the other hand, am an introvert geek and would die before talking about stuff like that.
The difference is simply our temperaments. In situations like that, it's not uncommon for the bold sibling(s) to receive more, for no other reason than that they simply wear down the parents. When that happens, it is easy for the quiet siblings to feel slighted in the disbursement of the stuff. (In our case, that didn't happen because it was split down the middle.)
Furthermore, people process pain differently. If a parent has a long illness, everyone has time to pre-process at least part of their grief. However, when a death comes suddenly, the grief is acute. Then when the will gets announced, grief colors the perception of the provisions among the heirs to an even greater degree.
How to avoid the war
As with all potential conflicts, it is possible to avoid the backdraft of a will, but it is not always easy.
1. Communicate: Death is a tough topic to deal with, there is no way around that. However, death is inevitable, as we all know. It is better for all concerned to have clarification about the provisions of a will before any parent passes. (Implicit in this, of course, is the need for everyone to actually have a will, but that is another topic.) The earlier this is done (and the further from the actual death event) the better.
Spelling out everything ahead of time will eliminate any surprises and defuse most of the conflicts. It probably will also give the soon-to-depart ones peace of mind that their passing will not create an unnecessary mess of problems.
2. Acknowledge it is only stuff: It sounds obvious, but it helps for all heirs to acknowledge that the contents of a will involves only stuff. Our lives do not revolve around stuff. After all, we too will be leaving it all when it's our turn to face the other inevitable fact of life (i.e., not taxes).
Furthermore, it helps for every heir to acknowledge that whatever stuff they receive will leave them better off than before. Whether it is more than they expected or less, it still represents an increase.
3. Get over the unfairness: Where there is a will, there is an unfairness … at least in the eye of most heirs. Because every person is so accomplished at justifying why they are entitled to whatever they think should be theirs, it helps to articulate the unfairness soon and do the only thing that will bring happiness: Get over it.
My sister stayed with my mom during her last two years of sickness, so she felt entitled to more. However, she received 10 times more than I did during our parents' lifetimes because she is so vocal in demanding everything. I felt a bit entitled to a “make-up” in the will. Conflict. However, our parents made the provisions of the will clear ahead of time, so we both had time to get over our feelings of entitlement. That ended up being a good idea.
4. Prepare for the unforeseen: Even with the best paid plans of mice and men, man's greed always lurks in the background when free stuff is being handed out. After my wife and I said our good-byes to my mom, my sister managed to get a lawyer to sneak in a last-minute amendment to the will to give her exclusive use of our parents' house for five years. (And then she left it to the lawyer to explain that development to me after she skipped out.)
Wow, talk about unforeseen. I was not prepared for that and did not react well. I wasn't any worse off than before my parents passed, but it was that thought-of-it thing. I should have been prepared for the unforeseen. Fortunately, as it turned out, the deeds office declared that amendment illegal when the executor attempted the transfer, which took the will back to its original provisions. As you read this, my sister and I will hopefully be resolving the inheritance once and for all.
Any time free stuff is handed out, human greed has the potential to awaken the ugly in us. When the free stuff handout is accompanied by emotional ties and baggage, it has the potential to get even worse. The key to success is to communicate openly, acknowledge it is only stuff (more than we had before) and that there is more to happiness than stuff.
How can families handle disputes over an inheritance? Share your thoughts in the comments below!
Author: William Cowie
William Cowie spent 30 years in senior management (CFO/CEO) before retiring. He has a bachelor's, a master's, and a partial doctorate in management and strategy. Author of the book “The Four Seasons of the Economy,” William also assists medium-sized businesses in the use of the Four Season Strategy to help them capitalize on economic cycles. He runs two blogs: Bite the Bullet Investing (investing) and Drop Dead Money (the economy) and writes for several other blogs in addition.
what are the chances of the beneficiary of a will if some one have claimed/challenged the will?
I find it strange when siblings fight over stuff. I lost my father in 2011. The stuff or things he left behind were the least of my concern. I have one older brother – he asked me what do you want to take / keep? I said nothing – I just took a few simple things my father used on a daily basis as a memory. I had no interest in anything else.
I’ve got more “stuff” than I need now. The big headache when Mom goes to her next phase will be what to do with all HER stuff. Children of the Depression never throw anything away! Yes, there are a few things I want, but they aren’t deal breakers. Oust wish we could convince Mom to actually write a will. Come to think of it, our wills should probably be revised soon.
All good tips — especially about communicating and making things clear ahead of time. Surprises at one of the most stressful, emotional times in your life is a recipe for a lot of hurt.
But one caution: it’s not just about “stuff” — unless life insurance payouts, stocks, bonds, property, etc. count as “stuff” too. It’s easy to think that you don’t care about “stuff” or that other people won’t argue over “stuff”, but wait until there’s cash to be divided up.
I’m trying to create my estate plan right now and it feels like I’m trying to head off potential conflicts between people rather than leaving money and valuables to people I genuinely want to have them.
When my mom died, stuff was only an issue because my brother and I both felt weird about having it and felt a duty to take it rather than really wanting the stuff. It was made even weirder by the fact that her husband was not included in the will, just my brother and I who were having to take stuff out of their house.
I guess both of us felt fortunate to be getting what we got too. Neither my brother nor I felt particularly like we “deserved” anything, so there was no conflict.
“However, the fact of the matter is that heirs do nothing to deserve what they are about to receive.”
I think this isn’t always true. In my family one of my siblings is providing elder assistance (including housing) to my parents and will inherit everything from them. This was all agreed to many years ago, and let’s just say that those of us who aren’t beneficiaries are filled more with gratitude than resentment, even though the estate will be substantial.
My grandmother had what seemed a clever solution:
Upon her death, her children and grandchildren could go through the farmhouse and pick out one thing that meant something important to them, and take it.
And anything else you wanted, you could buy at the auction, whereupon the proceeds would be divided between her two living children.
Sadly, when we showed up, my aunt (by marriage) and her three kids were there, with cars and trailers and spouses. And she announced they were taking anything we didn’t because “her kids needed it.”
There were three of us in a small station wagon, having driven in from two hours away.
Not wanting to make a scene, my mom didn’t challenge that, but then neither did my uncle.
Years later, Mom saw one of her beloved homemade dolls in pieces on the floor of my niece’s garage.
The lessons I learned:
I should divvy stuff up while alive, and EVERYTHING goes to auction.
:)
Another good life lesson:
Go to an estate sale.
While it’s sometimes great place to pick up quality tools and furniture, you realize all the sweat and blood and equity people put into things – things that you are picking up for pennies on the dollars.
Something to think about when you buy that new “must have” item.
RNR, this is pretty bad, but I’ve seen a lot worse, believe me. In fact, you got off easy. Family tensions and squabbles are often terribly severe… Some disagreements that will never let up no matter how much of an effort there is between siblings and family members to negotiate a resolution. To put it bluntly, this causes many heirs to decide to hire their own estate lawyer… and if they don’t have deep pockets, many heirs will get inheritance money, probate advance cash, advance inheritance money, from a loan on inheritance, from an inheritance funding company. Heirs borrow against inheritance and get a large probate advance loan, an inheritance advance, inheritance loan, or inheritance cash advance – as fast as they can, often just to get their own personal probate attorney on board. inheritance loans, probate loans from inheritance funding companies, are often their only option to improve cash flow. These folks research inheritance loans, probate loans, inheritance advance assignments… large estate loans, or even modest probate advance loans or trust fund cash advances. Or 72 hour inheritance loans, inheritance cash advance or simple inheritance advance assignments from one of the better known online inheritance cash advance companies that put fast probate real estate loans and regular liquid asset based inheritance loans, or inheritance advance assignments — into the hands of scared or nervous heirs who first learn how to get inheritance loan rates, inheritance advance fees, and then quickly submit probate loan applications to various online probate loan companies that provide numerous inheritance loans and probate loans services. These cash windfalls are actually fast advance inheritance cash assignments not technically loans, even though they are often called loans, or loans against inheritance, by established boutique niche inheritance advance companies like http://www.myinheritancecash.com, with particularly good customer service, in a way like the original Inheritance Purchase or maybe Budget Finance firms, back in the mid 90s. Companies that all provide the same sort of inheritance advance or inheritance loan service. Some more friendly, or faster, than others. This sort of windfall frequently seems to serve as real life-saver for many heirs with cash flow problems, but mainly it lets them function more bravely in the face of internal family issues like the type mentioned in this article.
My mother and her sisters worked out a system. They drew straws. The first chose anything in the household “stuff” first- working through the fifth person- and then drew again. It was a longer process- but people were much happier. My mom wanted the Family Bible over everything. My aunt wanted a very nice ring. They both got what they wanted.
Houses are a pain. My family has a vacation home. AGGGG! I am not looking forward to that issue.
IRAs are a problem as well these days- since they are transferable.
This was a very timely article for me after the holiday as my father has begun to talk about “fairness” in estate planning and I was surprised and hurt with how my brother reacted to the conversation.
My parents have always been very generous with both my brother and I and they recently paid off the rest of my brother’s mortgage – they specifically took out the mortgage with him so they could make extra payments without being subjected to gift taxes. They decided to buy me a new car to “balance” the spending – I don’t want or need a new car so I turned it down.
The whole mortgage pay off thing started my dad down the wormhole of trying to figure out how to account for fairness in a will. Talk about differences in siblings! I find the topic macabre and limit my contribution to “please make sure you have enough to take care of yourself in old age, have a living will and do whatever you need to do so that your estate doesn’t get help up in probate for a dozen years since I’m the child that will have to deal with it.”
To my honest surprise my brother had no problems giving his opinions on what a “fair” split is (hint* his mortgage doesn’t count against his “fair share” but my pricey private college experience does – he actually had typed up an estimate of what he thought my parents had spent on my education.)
I was so upset with him! Before the will discussions I honestly didn’t care about my folks paying off his house as I knew it gave them peace of mind – but discovering that he was nickle and diming my degree that I worked so hard for really hurt me!
All that to say – this is all fresh for me and really hitting home this week. I guess it is good for us to go through this now (no sibling wants to be treated unfairly) then when dealing with grief.
I have a brother and SIL like that. I’m very grateful my mother has a good lawyer to help with her estate planning.
She’s encouraged me to consult a lawyer when planning my estate so I have an objective third party to help make balanced decisions. I wonder if that might benefit your parents as well? For instance, I suspect a lawyer would easily spot that if your education counts towards the estate planning, so should the mortgage. No one can be accused of playing favourites when an expert says it.
I hate discussing this stuff too, and hope my mother enjoys what she has and gives away what she wants while she still can. But it does help to know your parents’ wishes in advance. As you said, it’s better to have these disagreements now than when you’re grieving and your parents aren’t around to speak for themselves.
Thanks – I should have them consult a lawyer (but they hate spending money on stuff like that:))
My folks have always been upfront with me, since I was in high school basically, that they would probably leave my brother disproportionately more in their will (this may seem weird but we have always been a family that discusses finances). My brother is one of those people who is a great guy but just can’t seem to be successful at adulting. I’ve always been okay with him getting “more” because at least that burden isn’t falling on me.
Ack- I hit submit too soon. Anyways – the thing that bothers me about this is that it is making ME feel petty and I’m having a hard time not counting up everything they pay for for him. I haven’t and I won’t – but part of me really wants to!
Sorry, but I tend to disagree that the brother who is having a tough time being an “adult” should get more from the estate. It just justifies all the “more” they have gotten through their entire life and why should you be punished for being the responsible child?
I have a sibling much like this, and now that my parents are gone, they are struggling and relying on another sibling, who is in poor health and has their own financial issues. The point is the parents have taught the child they will keep them from “failing” so they learn to never face failure because no matter what dumb move they make, they will be bailed out because of the “awful” consequence. Just be warned that once you parents are gone or drained, your brother will be trying to lean on you. It will likely start with cosigning something and progress from there. They will claim they will lose their home, or their car, whatever. Tell them how to refinance, etc. but don’t bail them out. Let them suffer, and they will hate you for it. Let them, because the alternative is they will drag you into the abyss with them and still blame you.
Some good advise here – but for people going through this with difficult family members, realize that sometimes there is just no way to win, no matter what you do. I saw this happen with my Mom and her brother. Even when she took the high road, he still made things difficult. The trick is to not get too hurt by it, and just move on.
With my wife’s grandmother, she was the “peacemaker” and seemed to be a linchpin on keeping people from airing their issues so there was all this simmering resentment that existed. When she died, the pin was gone and the pot burst and the whole process became more of a means to try and get back at folks for past wrongs and no one ended up “happy” with the arrangement.
I saw similar family issues with my friend when his mother passed and two of his sisters, both of whom had been sponging off the mother in different ways, where throwing hissy fits over who got what and my friend had to basically make decisions neither liked and blamed him when the other sister picked something they thought they were “owed”. It took years for them to be civil to each other. On the flip side, I’ve seen some hurt feelings but generally level headed distributions more often than not when the siblings are on speaking terms.
In the end it’s not about people getting what they think they “deserve” or what they think they are “owed”. It’s about settling the estate legally and as best you can.
I think you are right in saying that some people are just going to be difficult no matter what. I think it is important to realize this on the front end and deal with it; otherwise, you will be one of the families torn apart by a will.
I’m going through this now since my mother died a month ago. Some thoughts:
1. Be cautious about reading the will ahead of time. Some siblings will immediately begin badgering the parents to change the will which can lead to surprises after the parents die.
2. Immediately, most of my siblings told me they had been promised something from my mother’s estate. In some cases, the same items had been promised by different parents to different children at different times over the decades. Since there was nothing written down, I asked my siblings to think of me as a stranger who had no knowledge of past promises, and I promised they would get a chance at getting some of the item for free. See next item.
3. As executor, I allowed each sibling to take five free items from the estate. This was done randomly. The remaining items went to the highest bidder. Get this: *none* of the items my siblings has been promised were picked by my siblings even after being five chances to do so. Go figure…
4. Lots of communications – send emails with every major piece of information as it occurs. This had another advantage: it is easy to forgot which sibling you’ve told something and using email means everyone gets the same message. I also put the finances on a website so my siblings can see where the money is coming from and going.
So far, so good. There have been minor disagreements but nothing major.
One thing that has not been mentioned is mediation. There are mediators who have experience in dealing with matters of eldercare, wills and trusts and family conflicts over estates. The cost is moderate for what you can get in peace of mind.
Great insights in this article. Thanks for writing!
Being an executor is a very tough job, with more than 100 steps. Because of this, nothing beats frequent, transparent communication. Let the beneficiaries know what’s going on every step of the way.
I also believe that items in the estate should be valued by a third party, to help ensure distribution of assets not specifically named in the will is fair. If beneficiary A wants a diamond ring, and beneficiary B wants Mom’s pillow, the value of those items should be factored into the equation.
Patrick O’Brien
CEO, Executor.org
I have always told my kids that if they don’t get it from me while I am alive, to expect nothing from me after I am dead.
Part of the deal is to make sure they are very clear that what is mine, is mine, period. Anything they receive after I pass, is a gift, and not their due, not their right, not owed them, etc.. After all they owe me for their very existence, all else is a bonus. Don’t get me wrong, I love them, but I won’t tolerate any avarice on their part for things I own and I plan on using, like my nest egg. They shouldn’t be waiting on me to die to provide them their retirement. That just encourages their helping me to an early exit :-)
I have used the same rationale with my mother and MIL. I encourage(d) them to remember they can’t take things with them, and if they have “heirlooms” they want any of us siblings or the grandkids to receive, either give them to us while alive or write it specifically in the will so there is no confusion between siblings. This telling someone that “after I’m gone you get this” is practical BS because they tend to promise those things to multiple people as they age. I’ve seen to many fights over “things” and as one commenter mentioned, there is always that one sibling in most families who has been keeping a tally that is somehow wildly in their favor.
Our family had a multi-step process that worked very well.
Step 1 – before my parents passed away
a) The parents asked each of the five children to send them a prioritized list of the ten things they would most want to have after the parents passed away. To help aid their memory they sent a list of things they considered valuable or of high sentimental value and provided some general guidelines (for example, they had five paintings and they wanted each child to have one of them). They did this shortly before a family event where all the children would be home and have a chance to walk around the parents’ house and see things they might have forgotten that they might want in their top 10 list.
b) The parents took this information and converted it to a set of specific instructions in their will regarding who gets which of these particularly valuable or sentimental items. They worked to make sure each child got roughly the same amount in terms of financial value and as many of their top priority items as possible. An advantage of this strategy is that when they had to sell the house and move into a nursing home, the children knew which of the important items each should take with them at that time.
c) The parents had loaned money to some of the children, not all of which had been repaid. A ledger of what was owed was maintained by one of them and the ledger was referenced in the will so that any financial distributions from the will would compensate for money still owed. (See lesson learned at the end.)
Step 2 – after the parents passed away (or this step could be done when they sell the house and have to get rid of a lot of “stuff”).
a) The children selected the items specifically designated for them in the will, as described above.
b) The children got together after making an inventory of what was left. NO SPOUSES ALLOWED!!!!! The latter was a critical stipulation for this process – the family has learned and stuck by this stipulation over many generations.
c) The children estimated the value of each important item on the list, to try to keep things roughly equal in terms of financial value.
d) They went in order, each one choosing something and then going to the next child. If significant discrepancies in value were found (for example, one child selects a piano worth $3000 and the next chooses a clock worth $200), the one choosing the higher value item had to wait out while the remaining children continued selecting things in turn until all are roughly equal financially, then the “piano” child gets to partake in the next round.
Lessons learned
1) When it comes to compensating for loans still owed, you have to make sure that the child chosen as executor knows math! In our case, the one chosen did not know how to calculate it correctly and the others had to straighten it out.
2) You have to decide in advance how to handle sets. For example, a dining room or bedroom set would probably be treated as a single item, presumably of significant value, although an unusual piece that doesn’t match the others might not be included. By contrast, living room furniture is typically treated as separate items, although there may be pairs or other groupings that you want to treat as a set (matching chairs, etc.). If the children can agree on this, it’s a lot easier. It can be done when creating the inventory. In many cases, it really is a judgment call on the part of the children. For example, a pair of lamps might be treated as a set or might be split among two of the children. (In our case, the parents decided to split a few pairs like this when two children wanted the same thing, and in some cases the children later worked out a trade so that one of them would get both members of the pair.)
Hi William, Thanks for throwing more light on this issue of inheritance.
This issue of conflict over inheritance is alarming.
I think the aged should be more watchful on this.
Why will blood brother or sister threatening themselves over what they never labour for.
I agree with Beth on this- communication is one of the major step of controlling the unforeseen.
When this is clear ahead of time, and the attorney is aware, this problems of sharing inheritance will reduce drastically.
Pretty good ideas here on how to deal with estate distribution. From experience, I have found out that no estate plans make for more problems than good estate plans.
When my grandmother passed away unexpectedly a few decades ago, my brother assembled with my mother as the body was being removed. G-ma had an old steeple clock from the 1860s that had been in the family for years. My brother had the chutzpah to ask for it right then and there. In her grief, my mother gave it to him. I was appalled and complained later on (not at the death scene, that would make me a bad guy too). I don’t know that I would have gotten it, but at least I wanted some semblance of an opportunity; some fairness at the very least.
It was a done deal. There wasn’t much in the estate and my mother tried to make it up to me.
The clock stuck in my craw for years and it distanced me from my brother. But, years later when he asked me what he had that I wanted to buy from him (when he was short of money, I guess) .. I said the clock.
The fool set a high price on it thinking I would not pay that much. Without arguing, I reached in my pocket and peeled the bills from my money clip. I now own the clock, and had the works redone so it works and sounds like it did when I first saw it growing up at my grandparents.
A few years ago, he mentioned he would like the clock back. I told him no, there wasn’t enough money in the world to make me part with the clock. He tried guilting me out of it. Nope, didn’t work. I must have no conscience or something. Finally, he said that there was a stipulation when he sold it to me that it had to come back to his family when I died. I laughed and used descriptive language to tell him just where to go and where to stuff it.
We don’t speak now. Beside the clock, a few other issues separate us. But the clock stuck in my craw for years, and seeing as how he was stupid enough to trade a few Ben’s for it, I’m not sure that if he got into another scrape that he would not sell it to the highest bidder (outside the family)… so it will stay in my family, hoping to stay in the bloodline for years to come.
Bottom line: Dividing an estate unfairly can, and often does, result in siblings not talking to each other for an awful long time. Advice: Do it fairly and be ready to compromise. Peace in the family is better than stuff or money.