Sunday, March 11, 2012
Estate fights can cause even the closest of siblings to engage in long-term fights over a deceased parent’s belongings. Many times, however, the fights are not actually about the sought after belongings but are rooted, instead, in perceived slights and perceptions of unbalanced love. Sometimes siblings reconcile following an estate fight; however, many times the fight causes lasting damage to the relationship.
One common situation in which problems arise is when siblings with vastly different financial situations inherit a piece of property, jointly. The wealthier sibling may wish to keep the home, while the other child may wish to sell the property to receive the money and avoid paying taxes and upkeep. Parents can help avoid this situation by creating a trust specifically designed to cover the tax and upkeep costs of the property.
Another problematic issue concerning inheritances arises when siblings jointly inherit a family business. While buy-sell agreements can help in some situations, family feuds can continue far after one sibling buys out the other. The issue is compounded when one sibling works for the business and the other does not or when the business is a private corporation. In one situation involving a private corporation, attorneys for both siblings created a limited marketplace with specific rules for the stock, allowing the siblings and other stock holders to sell their stock every year.
While siblings may continue to fight over a parent's belongings, parents can take proactive estate planning steps to help reduce the risk of sibling fights. When parents take the time to discuss inheritance plans with their children, the outcome of the discussions can be extremely beneficial and can help establish open and constructive lines of communication between siblings.
For more issues arising from estate battles, see Caren Chesler, Siblings Scorned, Private Wealth (Mar. 2012).
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.