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Burlington, VT office 802.540.0529
Hanover, NH office 603.643.6072
Rutland, VT office 802.773.3822
Woodstock, VT office 802.457.9492

September 29, 2009 Newsletter Archive


Family Harmony And Your Estate Plan:
How To Keep The Peace Into Posterity

But Our Kids Get Along So Well With One Another...

"Oh my children will work out property distribution without any problems." Most of us tend to dismiss concerns about our children arguing over money and property after we are gone. Unfortunately, with some frequency, problems do arise and siblings do not simply work things out.

Why do problems come up? The reasons are varied and often complicated. Disharmony may relate to ambiguity about lifetime gifts, loans or advancements on an inheritance. Disharmony may arise due to inconsistent language in Wills and Trusts. And, disharmony may arise when family members have unresolved disputes.

Unresolved Issues

Though they may be accomplished adults, siblings may still be assessing their place in the family. Decades old events may still be very fresh for a sibling, or may surface upon the death of a parent. Then there is the very real loss of a parent, a parent who may have been the glue for the family or acted as a buffer to very difficult relationships among siblings. Without the parent to act as that buffer, the old wounds may reopen.

Additionally, extenuating conditions play a role in disharmony. For example, one child may have been a significant health care giver during a parent's last years of life, while other children were far removed from the situation. Tensions may arise if a caregiver child is given a larger distribution of the estate, or conversely, if that child feels that he or she has not been recognized for his or her care giving

Adding Clarity Leads to Harmony

So how best to manage these very challenging issues? First and foremost, the estate planning documents need to be clear. When children are treated differently, the documents should include an explanation if appropriate. If one child receives a loan of $10,000 and another child a gift of $10,000, that inconsistency needs to be addressed in some manner. If a child is being paid to take care of a dying parent document that fact, or perhaps prepare a caregiver contract, and discuss with tax professionals obligations to withhold funds for taxes.

The more obvious the strained relationships among siblings the greater the need to anticipate problems and seek to address them in the estate plan. Even when relationships seem harmonious, and especially where sibling rivalries are an issue, naming an independent executor and trustee to remove as much as possible the sibling conflict from the estate administration process is a prudent approach. Our experience in these cases is that the benefit of bringing in a corporate fiduciary can far outweigh the cost to the estate.

We recommend that you discuss matters with family members. We have conducted family meetings to facilitate open communication among family members. In a small number of cases this step is not recommended because it can create further tension among family members. However, if the situation allows for these discussions, it is often advantageous.

Mechanisms to Mitigate Future Squabbles

Ultimately the best advice we can give to reduce if not eliminate family disharmony is to honestly assess existing and future problems among beneficiaries. Once problems are assessed, then consider incorporating a mechanism in the estate planning documents to address family disharmony which might arise in the future. For some situations, a client may choose to include an obligation to mediate estate disputes. Some clients seek to force resolution through the use of a "no contest" clause under which any beneficiary challenging any aspect of the plan is disinherited. However even a "no contest" clause does not negate a challenge to the estate plan. Finally, keep your estate plan up to date to reflect changes that have occurred.

If you have concerns about your estate plan, give us to call to discuss options to reduce or eliminate the potential for family disharmony.

 

October Events

October 22, 12:30-1:30 PM
Wills, Trusts and the Probate Process
Daphne will speak at the Strafford Senior Center, Barrett Hall, Strafford, Vermont


October 28, 10-11 PM
Are Your Kids Protected? A Guardianship Workshop
Mark and Daphne will present a workshop for parents with minor children.
Discover how to create an estate plan that protects your young children. Join us at the Black Center, Hanover, New Hampshire

RSVP by October 26
603-643-6072


Melendy Moritz PLLC is a client centered boutique firm. We focus on your unique needs by providing the individualized legal counseling and advising tailored to your specific situation.

We concentrate on the planning that matters to you.
Call us at 603.643.6072 or 802.457.9492

 

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