|By PAUL SULLIVAN|
If there is a boogeyman when it comes to family conversations about inheritance, it is not death. That happens whether people talk about financial plans or not. It’s the
A report by UBS on why families should talk about inheritance confirms the reluctance of people to talk about death and money.
It’s easier to have a will (83 percent of respondents have one) than discuss the will with your children (about half have) and harder still to tell them what the assets are (34 percent of respondents have).
Wealthy and less wealthy people are equally bad at talking about their plans with their children. (Fifty-five percent of people with more than
And most parents want the transfer of money to their children to go smoothly (84 percent), without creating bad feelings among siblings (66 percent.)
Of course, the logic of all four excuses is easily refuted. But there is a bigger issue making the conversation about inheritance more angst-ridden than it was for previous generations.
“We just lived through an incredible era of wealth accumulation that is going to turn into one of the biggest topics out there today, which is how much money is going to be passed on from parents to heirs,” said
Like other areas of life in which there is strong data that should be dictating our behavior — like cigarette smoking, global warming and baseball statistics — people know what they should do but still struggle mightily to do it.
Here are some lessons on some of the more common problems that arise when conversations about inheritances do not go as smoothly as they might.
Sibling NegotiationsGetting parents to discuss inheritance plans is surely difficult; getting them to put a plan in place that will not cause years of fighting among their children can be even more challenging.
Janet, 58, who is retired and lives outside of
“Neither one of my parents is college-educated,” said Janet, who asked that her last name not be used to protect her relationship with her siblings. “They’re smart people, but they’ve never been trained in financial matters. It took awhile for them to understand it.”
She said the estate was valued at about
“Recently the conversation came up that instead of giving him merely one-sixth of the liquidated assets in cash, why don’t you give him one house and one-sixth of the remaining assets,” she said. “My parents kind of liked that idea because they’re concerned about him having a roof over his head. But I anticipate that if that comes to fruition there could be some disagreement among the other siblings.”
Janet said some of her family members felt little sympathy for this brother and wanted their full share of their parents’ money.
“People will be upset about it, but we can hide behind the codification of their wishes,” she said. “If they decide to give him an unequal share in the form of a house, my other sister and I will just hide behind what they want. We can say we’ve disagreed with them for 40 years,” she said, referring to her parents.
While this sentiment doesn’t evoke tender feelings, there is a pragmatism to it that works. The parents have put their wishes down on paper, and there will be no surprises when they die and their children receive their shares.
Tough Deal Fighting among children is always unpleasant for parents. But when what children might fight over is something that cannot be split, a resolution becomes more challenging. A prime example is a memory-packed vacation home.
“Both of our children are very attached to our summer cottage in Sawyer, Mich.,” she said. “It was still very important to them even though my daughter lives in
But she knew only one of them could get it.
The daughter, who works for a firm that does risk management for hedge funds, will get the cottage, Mrs. Rothenberg said, because “she’ll always have more money than my son and houses need maintenance.”
Her son, who runs a small think tank, will get two rental properties of similar economic, but no sentimental, value. “It was an easy choice and he understood it, I think,” she said, adding that there was another practical reason for the choice. “My son’s wife is highly allergic to many things and the summer cottage is surrounded by trees of all sorts.” At least with this family, there will be no surprises. “One of my goals is not to leave a mess of anything,” she said.
“Both sets of my grandparents have passed away in the last five years and the inheritances were handled by my parents,” he said. “I was not in the loop on that. I haven’t spoken to my parents about inheritance.”
Nor does he plan to do so. “My father has told me they have a plan in place,”
A potential heir’s reluctance to ask for more detail is common and understandable. “They don’t want to be perceived as greedy,” said
When her stepfather died, decades earlier, he left everything to her mother, but Ms. Hicks learned that no one had changed the titling of the assets since then, from certificates of deposit to ownership of their home.
“I had to go to court three times to get it handled,” she said. “I had to run an ad in the newspaper. I had to take copies of the will to the bank to get the CDs straightened out.”
This was not what she had imagined happening, since her mother had been so open. “I thought truly that if anything ever happened I would know where everything was and it would be handled,” she said. “One detail can make the biggest difference in the world.”
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|Source:||New York Times Digital|