In some cases, dear departed Mom and Dad have done everything right: they have an updated, legally sound will that lays out how they want their estate divided. Yet, despite their best intentions, the siblings bicker and the family is torn apart.
"Unfortunately, this is more common than less. It is a question of degree, whether it is a huge fight among family members or scrabbling over one specific issue," says Sara Plant, vice-president of wealth services at BMO Harris Private Banking. "But it rarely goes totally smoothly, the way the parents hoped."
A perceived unfairness - the old why-him-and-not-me? - is a main reason why siblings squabble over their inheritance. That can stem from issues such as who gets sentimental items like Mom's engagement ring or Dad's watch, or why money for one child was placed in a trust and another's was not. How the cottage was divvied up and who was chosen to be the executor can also be lightening rods for conflict.
Toronto estate and trust lawyer Suzana Popovic-Montag says parents can unwittingly lay the groundwork for family scraps by not talking to their children about estate plans before they die. "People are afraid to let them know what they want because they don't want to fight during a lifetime. They figure the family will sort it out once they are gone."
She encourages parents to discuss their estate plans with family members. "Let them know what, and why you want something done. This is a different generation, people communicate more than they did 50 years ago," said Ms. Popovic-Montag, a partner at Hull & Hull LLP.
In the hope of avoiding these types of family feuds, we asked Ms. Plant for five reasons that families fight over their inheritance:
1) Perceived inequity or "unfair" distribution
Most people are interested in making things as fair as possible among family members. But parents and kids can have different perspectives on what is fair. For instance, the parents might think it makes sense to leave the cottage to all three kids, while the child who uses it most might think they should get a larger portion. Likewise, children can be upset if their parents decide to hold one child's money in a trust and leave another their chunk of cash outright. "It could make sense to do things equally or it might not. We try to make our clients aware of this issue so they think things through," Ms. Plant says. "It is a tricky balance."
2) Lack of trust among family members
When parents die, the balance of power within a family changes. In some cases, deep-seated resentments surface and people question the motives of other family members. If one person's spouse ends up having influence over the process or if there is a sense that the executor is favouring one person, that can disrupt the family dynamic. Concerns about whether things are being done in everyone's best interest and whether someone is benefiting more than the others are the most common ways that trust breaks down and the bickering begins.
3) Distribution of personal items
Because it is impossible to put a price on a sentimental item, this is often that part of the estate plan that causes the most problems. In the past, family photos were a big issue, a problem that has since been eliminated by scanning technology. People might not understand why parents chose to give their antique sterling silver set to someone else. Ms. Plant suggests that parents write a letter of wishes that sets out where and why they want these items distributed. If that fails to settle the dispute, executors can turn to other strategies like a lottery system or bids.
4) Unpopular choice of executor
Most often but not always, the executor is a member of the family. Parents tend to see it as a position of honour, so they choose the oldest child or the one that has the right professional designation. But other family members can feel that it was given to the wrong person, that their parents didn't trust them to do it and that they are excluded from the process. All of these feelings can lead to resentment. Although executors can claim monetary compensation, this is generally not the reason that families fight, Ms. Plant says. A good executor is someone with the time, desire and ability to deal with the time-consuming process of administering an estate. Some parents looking for an impartial executor opt to hire a trust company.
5) Will contents take family by surprise
Some children see their parents' will for the first time only after the deaths and can be shocked by the contents. Talking to family members about your intentions before you die is the best way for parents to avoid this pitfall. People don't need to get into monetary details but should give their kids an idea of what to expect, Ms. Plant says. It can be a difficult conversation because children don't want to think about their parents passing away, no matter how old they are. Alternatively, kids don't want to seem greedy by asking about the parents' intentions. But experts agree that discussing estate plans with family members is the most important step parents can take to avoid conflict.
Roma Luciw is a writer and web editor of the Globeinvestor.com personal finance site. Please send any comments and story ideas to email@example.com.