By Alan G. Orlowsky, J.D., C.P.A.
Hank and Betty, both in their eighties, each named their two adult children as co-trustees of their trusts. Hank died, leaving a $2 million estate.
While Hank´s estate was still being administered, Betty died, leaving a $1.5 million estate. The two children, Bill and Diane (both in their fifties), feuded over every dime in both estates, causing long delays and costly legal fees.
Hank and Betty (we´re not using real names in this article) could have prevented that messy state of affairs by doing one of the following when they created their estate plan:
Feuds between siblings are not rare when one or both parents pass away. They feud over who should be in charge of the estate, the amount of fees that the executor takes out of the estate for services, how to divide up their inheritance, how and when to sell or take possession of their parents´ real property or business interests, who´s taking advantage of whom, who´s being greedy, and who´s being left out of the decision-making process. Sometimes they will use the occasion of a parent´s unfortunate death to perpetuate ancient sibling rivalries, even if it becomes very costly and is contrary to their best interests. Welcome to real life.
By taking a few simple precautions now, you can prevent – or at least minimize – feuding between your adult children. Here are the most important precautions:
Having such discussions with your children will help teach them the right way to relate to their children.
If you are uncomfortable discussing any of these topics with your children, ask your lawyer or other adviser to meet with them. Even if your relationships with your children are somewhat strained, they are still your children, and you undoubtedly want to save them from undue stress and heartache. Also, the discussions you have with them now can go a long way toward mending those relationships so that you can enjoy your family in your remaining years – that´s what it´s all about. So don´t wait until you are dying to speak up. Do it now.
Alan G. Orlowsky, President of Orlowsky & Wilson, Ltd. in Lincolnshire, Illinois, has been counseling people on estate planning for 28 years. He previously worked for the IRS in its Estate and Gift Tax Division. He also worked for the Deloitte & Touche accounting firm, and he has taught taxation and accounting at Loyola University of Chicago, School of Business.
Al is a contributing author of the book 21st Century Wealth (Esperti Peterson Institute, Denver, 2000), and has written numerous articles on the subject of estate planning. Contact Alan Orlowsky by email or call 847-325-5559.