Part 2 of our Series
Sources of Family Conflict in Estate Planning
Last week we wrote about Sibling Rivalry as one of the sources of family conflict in estate planning. To read that post, click here. This week we discuss another source – deciding who is in charge. When you create your estate plan there are several roles you will need to assign to people to properly administer the estate. Deciding who will have the responsibility for various roles is a careful thought process and not necessarily dependent upon who is the oldest child or the closest family friend. These important decisions can also lead to family conflict so careful planning can help avoid those issues.
Control issues – Who’s in charge?
Close friends?
If there are no children, many people who knew the person who died believe that they should be the beneficiary. They will start wrestling to try to get a “cut of the pie”. A relative and trustworthy friend may be the proper person to control your Trust after you are gone.
Who is your family?
I have a wise friend who says that for many people their “Birth Family” is their “Tribe” and their “Real Family” are the “Friends” God gives them on their journey of life. For some people their definition of “Family” is “Friends. They may not be related to you by blood, but they can be the people who you are in relationship with. For others it is only blood relatives that are their beneficiaries. Some people only socialize with the people that they are related to. Often it is the question what is the client’s version of “Family”.
Oldest child?
If the Trustee the parent chooses is not fair or bullies the other adult children that can be a problem. Choosing the oldest adult child may not be the right choice. Maybe two children as Trustees is a better option.
Choosing the oldest child to be the Trustee can be a real problem. Such as, if you choose the Electrician because they are the oldest child, versus the youngest child who might be the Lawyer or Accountant. The Lawyer/Accountant works with their mind in a different manner and may be much better at record keeping and much more efficient in handling the Trust.
Right people in the right roles
You have to put the right people in the proper roles. They need to be in the proper roles once the strengths and weaknesses of the “Family” are determined. You have to have people who are competent and trustworthy to handle the money.
Everyone has strengths and weaknesses. My father would say, “Everyone has a sack of rocks, they just have different rocks in their sack”.
One child controls another long term
Putting one child in charge of other adult children in long term Trusts can be a problem. In essence, you are putting one of the adult children in the place of a parent over the other adult children. This is likely to create resentment over time.
Independent Trustee
Often an independent Trustee, or Financial Institution, an Accountant, or independent Trust Company is needed as a Trustee. This is especially the case if none of the adult children are able to handle the duties of the Trustee.
Other roles – Health Care Agent
If you choose the wrong Health Care Agent, you may encounter big problems. You want a Health Care Agent who will follow your desires versus their desires (or unresolved issues). You need someone who will be a strong advocate for your health care against the bureaucratic health care systems and follow your desires, not their own.
Are the other adult children are so jealous of the competent adult child that conflicts are likely to arise? You have to Estate Plan for that.
Next in this series: Part 3 – Family Secrets
Part 1: Previous Post: Sibling Rivalry
At the Law Firm of Steven Andrew Jackson, Attorney and Counsellor at Law, we have helped hundreds of families protect themselves and their loved ones, avoid Estate Taxes and Probate Costs, and keep their Estate Plans current with the law through The Customized Protective Estate Planning Solution™.