Pre-Existing Family Issues
Inheritance, and estate settlement in general, can often exacerbate pre-existing family issues. Some call it “baggage”…and almost everyone has some baggage that is unfairly brought into the process of dealing with a family member’s assets, and their distribution, or more accurately, its re-distribution.
These issues can be traced to:
- Basic sibling rivalry or patterns:
- You and your brother always competed for your parents’ favor.
- Your sister typically dominated family discussions and would insult others if decisions didn’t go her way.
- Perceived favoritism due to birth order, accomplishments, gender, or other things:
- Since your brother followed in your father’s footsteps as an architect, he was always the “special” one.
- Unresolved or past offenses:
- You married your sister’s old boyfriend and she’s never gotten over it.
- Fundamental personality differences:
- You make decisions quickly and your brother mulls over things forever.
Treasured Item Issues
The distribution of tangible assets can cause hard feelings in even the most congenial of families due to:
- Perceived entitlement to certain items due to family standing, profession, interests, or other reasons
- Thoughts of being “promised” certain things
- Supposed or real distribution inequities or unfairness
- Attachment to items of great sentimental value
Issues can also arise due to how or what inheritance settlement decisions are being made, including:
Property issues, such as:
- Should property be sold as is, updated, or completely renovated?
- What’s the upper limit of what should be spent on the renovation?
- How should an heir purchase be handled? What updates should be made, if any, prior to the sale?
- How should household goods be distributed: estate sale, auction, donation, heir selection, or something else?
The method used to distribute tangible assets and who can participate in the selection process
Which professionals or trades people are used to aid in the inheritance settlement and distribution process
Decisions need to be made at virtually every step in the inheritance settlement process, and each one represents a potential conflict waiting to happen.
Settlement Process Approach
Use these four simple steps to promote the reduction of settlement conflicts:
- Be aware of potential issues and personality conflicts
- Plan specific ways to avoid or overcome conflict situations and to approach settlement actions
- Communicate settlement goals, plans, methods, and intentions early and often during the settlement process
- Follow through with plans, keeping the focus on what is being accomplished
The following pages provide more detail about each step in this Approach.
Be Aware of Potential Issues
Being aware of possible issues can better prepare you on how to handle them when and if conflicts arise. It can also help you gain insight on communication between the various heirs. Things to think about are:
- Think through your family’s history and identify any potential sticking points, such as past conflicts, current friction, or subtle long-standing pockets of disharmony
- Think through the tasks included in estate settlement and pinpoint any specific areas of concern, such as the distribution of a treasured antique
- Think through each heir’s areas of expertise/ experiences to identify where he or she may be a resource for advice
- Realize that actions or suggestions provided by those who are not direct heirs (including spouses, friends, or even professionals) may be viewed with suspicion by the other heirs
- Be aware that decisions and actions will probably be “second-guessed” or a “better” solution may be voiced
Plan Strategies that Promote Peace
Treat the settlement as if it were a business project and:
Develop a statement that defines your wishes for the settlement project process. Example: My intent is to settle all estate matters in the most fair, efficient, peaceful, and economical way possible to honor our loved one’s life and written decisions, and to value and respect his/her hard-earned possessions.
Have an appraiser identify items of value and suggest which should be given special handling, e.g. he or she may suggest that particular collections should be sold in tact versus separately
Plan ways to deal with each category of tangible possessions, for example:
- Jewelry may be distributed via a round-robin selection process, where the oldest heir selects first and the youngest selects last
- Antiques may be distributed using a private auction, with each heir receiving “X” play dollars
- Sentimental items may be distributed last to allow for some healing prior to selection
Develop guidelines for your behavior, resolving to:
- Treat each heir’s opinion, objection, or concern with as much respect as possible
- Ask questions to draw out the reasons behind
For each potential sticking point, identify an action that reduces the potential conflict, for example:
- Decide on an unbiased method to use to decide the outcome of conflicts, e.g. flip a coin, use a third party who has no vested interest in the outcome
- Secure the property immediately to prevent heirs from retrieving “promised,” but undocumented, items
- Use a non-confrontational method of distribution if conflicts seem imminent, e.g. meet with heirs one-on-one to identify which items appeal to each, then determine fair distribution behind the scenes versus conducting a head-to-head private family auction
- Bring in an impartial third-party, either to act as mediator or to exert subtle pressure for participants to maintain composure
- Hold communication/planning meetings in public places
Identify a stopping point, such as when things have gotten too heated, and determine a non-confrontational “plan to reconvene” statement.
Example: I realize that this selection process is stressful, and I thought that we’d probably need a couple of days to
Meet with your estate professionals (lawyer and accountant) early in the process to:
- Identify any legal or tax implications concerning the estate or its contents
- Create a plan for the completion and execution of the legal and tax-related settlement duties, court filings, and property transfers
- Obtain information about an executor’s legal and fiduciary responsibilities and authority during the settlement process
Identify guidelines for the heir’s interactions, such as:
- Treat all suggestions and comments with respect
- Choose words carefully to minimize hurt feelings
- No backbiting, shouting, interrupting, or discussing past conflicts
- Avoid interpreting another heir’s motives for selecting a certain item
Communicate Intentions and Progress
Communicate settlement goals, plans, methods, and intentions early and often during the settlement process to prevent surprises and foster cooperation.
At the beginning of the settlement process, meet to communicate and discuss:
- Your settlement “intent” statement
- Your belief that a sibling relationship is always more important than things, and that you intend to conduct settlement activities in a way that supports that belief
- Your role, responsibilities, and authority as the executor as defined by your settlement professionals
- Your commitment to fairness
- A rough idea of your game plan for completing each facet of the settlement
- Your communication plans
Solicit buy-in from heirs to commit to do everything possible to promote a fair, equitable, and peaceful settlement process
As the settlement progresses, communicate with the heirs to:
- Provide updates concerning settlement progress
- Solicit questions
- Express appreciation when peace is maintained or peaceful actions are taken
Follow Through and Follow Up
Providing attention to detail and following through with actions and promises promote professionalism and demonstrate to the other heirs that you are capable of managing the settlement process.
- Adhere to the plans communicated to the heirs
- Start meetings promptly and stick to the stated agenda
- If you notice that a method or process is not working, modify it, but communicate the changes in advance, detailing why the method is being changed
- Listen attentively and follow up quickly on any action points or questions that come out of discussions