Unresolved issues among family members often can be exacerbated by financial ones. These often include the following:
- The children may be in vastly different circumstances financially and the parents may have assisted one or more and not others. Should such assistance be treated as loans to be offset in inheritances or as gifts?
- If some children are so well off that any inheritance will make no difference in their lives, is it okay to leave them nothing?
- If one local child has acted as a caregiver for the parents, should they be compensated in some way, especially if they have had to reduce their employment or given up job opportunities?
- If there’s a vacation house and some children and grandchildren value it more than others, how should that be handled?
- What are the parents’ values in terms of long-term care? Do they want all efforts to be made so that they can receive any necessary care at home no matter the cost or are they willing to move to a residential care community where care may be provided at a lower cost?
- How can children raise these issues without upsetting their parents by bringing up their possible disability and eventual demise.
All of these can be difficult issues to discuss and often are avoided in the interest of maintaining family harmony. Sometimes the children are too busy with their own lives to have the “bandwidth” to focus on issues that don’t seem immediately important.
The problem is that avoiding conversations can work in the short run but can lead to disagreements in the future about how care should be provided and paid for, whether adjustments in the estate distribution should be made for prior assistance provided, or whether a family vacation home should be maintained or sold.
Some Examples
Two recent stories come immediately to mind.
Our office is handling an estate where one child has found his mother’s notes that she made loans to a sibling. The sibling denies that some loans were ever made and claims to have repaid the others, but has provided no financial records to back up either claim.
A friend of a friend who had the dubious honor of being named personal representative of his mother’s estate told of us his woes in trying to prepare her home in a vacation community for sale. One of four siblings and her spouse had always spent the summers in the house and wanted it kept in the family. The other siblings had no interest in the house and their sister could not afford to buy them out.
The sister and her spouse showed up to spend one last summer in the property as the our acquaintance was trying to get repairs made to put it on the market before the end of the summer season. This caused considerable conflict with the people working on the house and between the siblings.
Possible Solutions
In both of these cases, family discussion, transparency and a clear statement of intent by the parents might have eliminated some of the strife. Or it might have simply accelerated it causing stress for the parents that they were hoping to avoid, but I think that in most cases the children will honor the parents’ wishes if they are clearly stated.
Sometimes, estate planning attorneys can help facilitate these important conversations. But that can be expensive if the lawyer charges by the hour and lawyers are not really trained to be therapists even if they sometimes play this role. Some financial planners are also comfortable in participating in these family conversations.
There are some on-line tools that can help. The Conversation Project created by Pulitzer Prize winning columnist Ellen Goodman has wonderful tools for discussing the health and long-term care side of these issues.
The Principal Company provides some good guidelines for getting started with family financial discussions.
Some therapists are now specializing in financial family therapy and there’s even now a Financial Therapy Association whose website includes a directory of family therapists.
Mediators can also help, especially where there are disagreements that need to be worked out. In Massachusetts, the website of the Massachusetts Council on Family Mediation includes a directory with a category for mediators who work on estate planning and probate mediation.
With or without assistance, we urge you to discuss your financial plans and wishes with your family so there are fewer surprises and misunderstandings in the future. This can help avoid leaving a legacy of strife (even if there’s no guarantee).