Help avoid family conflicts about your estate

Chances are that you want to pass along some of your property, assets and wealth to your heirs. CEG Insights research finds that nearly 60% of affluent investors say living a life of significance means taking care of the people they value.

It’s also likely that you want the wealth transfer process to be smooth and clear, with your heirs walking away pleased.

Unfortunately, the opposite outcome occurs too often. Conflicts among family members over inheritances are common. The impact can range from hurt feelings to estrangement and significant legal bills, meaning a portion of your wealth could end up in the hands of lawyers instead of your heirs.

That’s why it’s important to arrange your estate plan so it reflects both your wishes and any family dynamics that could cause problems down the road.
What can cause family conflict? Many circumstances can contribute to disagreements over the money or possessions you leave behind, including:

• Your spouse or partner is not the parent of your children.
• You have stepchildren or children from multiple marriages.
• You have an estranged adult child.
• You don’t approve of an adult child’s partner or spouse.
• Your children don’t get along.

• You want multiple heirs to co-own certain assets.
• You want to leave items to a friend who is not related to you.
• You haven’t clearly stated who should inherit specific items or assets.
Steps that may help prevent estate planning fights.

Be honest about family tensions.

You may know that your children harbor negative feelings toward your spouse or that siblings have long-standing resentments. Tensions that have been simmering can quickly boil over when an inheritance enters the picture.
Consider these potential pain points as you create or revise your estate plan.

Consider the appropriate balance.
Estate planning can provide an opportunity to balance the scales financially. If you gave substantial sums to one child during your lifetime—for education or to start a business, for example—you might consider leaving more to another child who received little or no financial help, particularly if the difference has caused friction.

Don’t overlook collectibles and heirlooms.

Some of the biggest family conflicts arise not over retirement accounts, but over sentimental items with relatively little monetary value.

Decide who will receive specific belongings and communicate those decisions.

You might also ask your children which items they most value.
Think carefully about joint ownership.

Leaving an asset to multiple heirs may seem equitable, but joint ownership can create practical challenges.

could lead to disagreements if the owners have different ideas about its future use.

Communicate your decisions.
Once your plan is in place, communicate your wishes, intentions and decisions to your heirs. Explain what you are doing and the reasons behind your choices.
They may not agree, but they will understand what to expect and have time to come to terms with the outcome.

Consider holding a family meeting.
A formal family meeting facilitated by a trusted advisor can help family members better understand financial goals, estate planning decisions and the values behind them.

Introduce your heirs to your advisors.
Consider introducing your heirs to the professionals they may work with in the future, including your wealth manager, estate planning attorney or banker.
This allows your heirs to become familiar with them and may help set the stage for a smoother working relationship.

The future is uncertain. By taking proactive steps now, you could potentially help create a more peaceful, conflict-free environment for the people you care about most.

Thomas M. Dowling, CFA, CFP®, CIMA® is the Head of Wealth Management at Alliance Global Partners of the Lowcountry on Hilton Head. He can be reached at infohh@allianceg.com or (843) 420-1993.