(Arabian Business) - When the time comes for the assets of an estate to be divided up among family members, the expectation is of a harmonious distribution of wealth and the shared joy of an inherited legacy.
Unfortunately, in practice this isn’t always the case. What was a thoughtfully created plan for the smooth transition of assets becomes anything but, and instead of providing the intended security and solace, the inherited wealth becomes a battleground for sibling disputes and conflicts.
This article looks at some simple strategies you can use to ensure your legacy isn’t overshadowed by sibling conflicts and that as well as providing financial security, it also preserves family unity.
Acknowledge family tensions
The death of a parent is a difficult test. When experiencing grief, siblings are less likely to be logical or even cooperative. The emotional strain can also cause old tensions from the past to resurface, particularly in cases where assets are shared unequally whether real or perceived.
It’s important to recognise these undercurrents of emotions that may exist among your children. Resentments can quietly simmer beneath the surface and when it’s time to divide up your assets after you’re gone, these feelings very often boil over.
Understanding that what may appear as equal treatment to you might be viewed differently by your children is crucial. One child might harbour feelings of having received less attention or less financial support as they were growing up, leading to later grievances.
Deal with any underlying tensions now. Having frank one-on-one conversations with your children can reveal their perspectives on inheritance and any feelings they have about inequities within the family. You can then tweak your plans accordingly to make sure that what you leave behind doesn’t lead to arguments and unnecessary conflict.
Ask them what they want
One of the simplest ways you can understand how your children feel about their inheritance is to ask them. It may seem like an uncomfortable or awkward conversation, but it will spare any nasty surprises or grudges down the road. It may also reveal some things that you weren’t aware of. You might find that an old trinket you’d given little thought to holds significant sentimental value for one of your children.
Let them tell you what is important to them, taking turns to pick their desired items and if more than one of them wants the same thing, use a little creativity to decide the fairest way to decide who will inherit it.
Having these conversations can uncover information that allows you to tailor your estate plan to align with their values and priorities and ensure that they are happy that it’s an equal distribution.
Avoiding ambiguity: Clearly stating your wishes
As you’re considering how to divide your assets, including properties and sentimental items, give some thought to the differing financial positions and preferences of your children.
While one might be more financially secure and be able to hold onto a property until the market is favourable for selling, another might be in need of money and have to sell straight away. Recognising these differences is crucial to tailoring your estate plan to accommodate their unique needs.
Equally, the sentimental value attached to certain items can be a minefield if not addressed explicitly. A family member claiming they were promised a specific item, without it being documented in the estate plan, can lead to hurt feelings and disputes.
Openly communicate your wishes, addressing financial disparities between your children so that they understand the reasons behind your decisions. Then clearly state who should inherit specific items in your will or through an addendum. This eliminates the possibility of misinterpretation but also demonstrates your commitment to being fair and transparent.
Give gifts during lifetime
Consider giving some items to your children before you pass away. This way, they get to enjoy these gifts for a longer time, and it might prevent any disputes over them later on.
Just keep in mind that the rules about gifts can vary depending on where you live. In many places, there’s an annual gift tax exclusion, allowing you to give a certain amount each tax year without it counting toward the total value of your estate for inheritance tax purposes. It’s always a good idea to check the specific regulations in your country and discuss it with a tax professional for personalised advice.
The neutral hand: Selecting an unbiased trustee
It’s often common practice to designate a family member, typically one of the children, as the fiduciary or executor. However, this is rarely the best choice. While that child may have more of the necessary skills for the task, when one single family member has all the responsibility for handling the entire estate, it can inadvertently create exactly the kind of conflict you’d want to avoid. Having two or more siblings as co-executors could be equally problematic if they can’t agree with each other.
A better alternative is to appoint an impartial third party. A paid professional with no legal or familial interest in the estate will be able to ensure a level of neutrality that may be difficult for a family member to maintain. Your children will then be much less likely to fall out over perceived favouritism or personal grievances.
Final thoughts
Ultimately, navigating sibling conflict in estate planning all boils down to transparency. You may not be able to anticipate every conceivable disagreement among your children, but the clearer the financial picture you can give to them and the more you involve them in the estate planning process, the less chance of conflicts and ill-feeling after you’re gone.
By Kim Medina
December 18, 2023
