The passing of a close family member is never easy. While our focus should be on the enjoyable memories that we had with our loved one, our mind often gets overwhelmed as one deals with a loved one’s estate. The best way to prevent a family feud financially after a loved one’s death is to begin the process now and take the necessary steps to prepare through estate planning. Our team at Dunncreek Advisors is here to help you every step of the way.
Avoid Tension
Over the years, we have dealt with a 75 year old client that quickly gets angry when the family farm even gets mentioned. Her parents passed away 25 years ago and to this day she is still frustrated about how her parents divided up the land. Siblings that we have worked with no longer speak because of tension over who got dad’s favorite bottle of scotch. Family members that were not able to agree on splitting up the parents household ended up resorting to cutting cards for each item in the home. The common theme with these situations is that the tension was built up around family members thinking that legacy planning should always be fair. The truth of the matter is that the situation will never be fair. Rather than feeling stressed and making rash decisions based on heightened emotions after a death, invest in the legacy planning process.
Keys to the Legacy Planning Process
Legacy planning is not just a one time event. It is a process that needs to be reviewed regularly. Over time, situations and priorities change, so it is very common to make adjustments to your estate plan. At Dunncreek Advisors, we have found that the following keys will help build goodwill with your estate planning:
● Forget About Being Fair - There is no way to please all family members involved in a legacy plan. If you are serious about avoiding a family feud, you must forget about being fair. If you have a family business where not all family members stay involved in the daily tasks of running the business, the individual who shows up to work everyday has more of a stake in the business long term. Other family members that just want their share and then want to sell or leave are not as invested and therefore should not get as much of the business in this situation.
● Protect the Business First - If you want to protect the legacy business, you must make decisions to protect the business first. Then you can distribute a fair share to other family members at that time.
● Consider Life Insurance - If you are trying to equally distribute the estate, life insurance could be used to generate additional cash that can be used as a “cash out” to the non invested heirs.
● Communicate Regularly - Throughout the legacy planning process, talk early and talk often.
● Set Up A Meeting - Get all of the family members in one room and explain your legacy plan. Give reasons behind your decisions so that everyone is on the same page. Once a year, get the family together to review the plan and provide any changes or updates. When developing a legacy plan, no plan is perfect.
At Dunncreek Advisors, we aim to help you develop a legacy plan that will keep your family financially protected after you leave this earth. If this article has you thinking about your own circumstances, contact my office at rdunn@dunncreekadvisors.com. I am always happy to meet with people who are working on their retirement plans. Dunncreek Advisors does not provide legal or tax advice, nor is this article intended to do so.