Maintaining Family Harmony
The attorney for one of the two children, Steven Glanz, has represented some of the wealthiest individuals in Australia and he has found that three things help make the process smooth regardless of the size of the estate. I agree wholeheartedly with his first two principles and would modify his third. Failure to do these three things increases the risk that siblings will be upset with each other long after the patriarch is gone.
First, a conversation should be had with family members – this is especially true when assets are not being divided equally. This is hard for some people to do for a variety of reasons. One might be that causes the individual to have to deal with his/her own mortality. Even if that is not an issue, it may be difficult telling one beneficiary he/she is getting less than his/her sibling. Failure to do this however, may result in the person receiving the lesser share being permanently upset with his/her sibling who is receiving more.
Second, is that only in limited situations does it make sense to keep the family financially interdependent on each other. Most of the time it is much better for each person to be able to go his/her own way. This can become an issue when there is a family business. Now, if both children have worked in the business and the future has been discussed with them, it may work out satisfactorily. However, a large percentage of the time issues will ultimately present themselves. For example, maybe the children do not work well together; or, maybe their spouses do not get along so well. Moreover, what happens when one of the children passes and his/her spouse now has his/her share?
Mr. Glanz’ third principle is to treat all heirs equally especially in the blended family context. My modification would be that the spouse who has the most money must be forward thinking and explain to his/her children what he/she is doing especially if he/she is decreasing the amount of money that the children would have received had he/she not remarried.
To sum it up, estate planning is about thinking things through. It is about considering all of the possibilities – even those that are incredibly unlikely.