It is easy to talk about tax law since it is a science. Family harmony, on the other hand, is a very personal art –mastering both results in the ideal harmony-creating will!
Most people would agree that family harmony is more important than the things they own. However, how can family harmony be achieved when writing your will? And, is equal the same as fair when it comes to writing a will?
You love your kids the same, but they are in different situations. Some are involved in the day-to-day running of the family business with you, while some are not. How then do you determine your inheritance plan for them? Imagine yourself in the place of each of your children. How would you feel getting what they are expecting? Or not expecting?
Bearing that in mind, let’s look at some tips that you can incorporate into your will and pitfalls to avoid so that long after you are gone, your family remains in one piece living in harmony. Otherwise, what good will it do to them?
Communicate Your Plan
Some of the best experiences that come from succession meetings are where parents explain their plan to all the children. This is especially useful where children are treated differently in order to arrive at a fair and equitable resolution. Avoid surprises by taking the time to explain your logic to your children.
A study sponsored by National Life of Vermont on family businesses revealed how businesses failed within four years of being transferred to the second generation. Unfortunately, 97% of the inheritors blamed founders for not preparing them adequately to make a successful transition.
Grossly Unequal Shares
While many parents insist that their kids get along just great, sharing property has a way of bringing out the hidden and true character in people. Decreasing the inheritance of financially successful children seems like a punishment. Bearing in mind that many children are driven to success simply to please their parents, decreasing the inherited share is a crushing blow to the over-achiever and may be perceived as a lack of affection.
If there is no way of avoiding helping one child out more than another, then do so discreetly. Don’t let your will or trust publicly display your favoritism. Offer confidential lifetime gifts to the needy child, like a life insurance policy.
Usually, a parent is under no legal obligation to leave a portion of their estate to their children. So if you have a child that has been especially reprehensible, your desire to disinherit them will not be challenged by the State. As Noland puts it, “The laws of the state where you reside must be carefully dissected to determine how your estate planning documents should be prepared in order to disinherit a child. In Arizona, the provisions of the will or revocable trust must clearly identify and disinherit the child.
At the end of the day, none of us are perfect and the same goes for our children. So you might want to exercise grace for the sake of harmony.