How Inheritance Destroys Trust in Relationships

I have been beyond shocked the past few years to see the devastating impact of inheritance or potential inheritance on family relationships in educated families. So I am writing this with the hope that parents will think wisely and carefully about what they leave behind the day they are no longer there.

Have your will and paperwork in order

A daughter is left with her deceased father’s estate in a total mess. When he was alive he gave no thought to wrapping up his investments or updating his children on his financial situation. He owned properties in foreign countries at the time of his death. His daughter has spent over 13 years trying to resolve matters. Each country has its own property and tax laws. She has had to spend months trying to get on top of the situation from a legal and taxation point of view. The impact on her emotionally has been enormous. It comes at a time of her life when she could be enjoying her life. Instead she is left with highly complicated legal issues to resolve across borders.

Why did the father not have a will? Why did he not simplify matters around his foreign properties timeously? Why did he not talk to his children about his financial situation while he was still alive?

Impact of one of your children as executor

Many parents appoint one of the children as executor or co-executor. It has been a complete eye opener to see in how many cases the other siblings do not trust the sibling who was appointed as co-executor! It is as if years of suppressed emotions, anger or resentment toward a sibling or even a parent suddenly plays itself out.

There are often unjustified accusations and suspicion. E.g. a child thinks the father’s estate was much larger than it was. The father had never shared his financial situation or will with all his children. This has in cases resulted in siblings suspecting their executor sibling of siphoning off funds. It becomes even more emotive when one child was given power of attorney by the parents. Often the matter ends up in court, destroying any bond there was among the children.

Leaving property behind

It may sound wonderful for parents to leave their beloved property to the children as part of their inheritance: either in a trust or to one of the children. This leads to untold conflict, hurt and anger in some families. If there are several children it becomes more complicated. Maintaining a property inevitably costs money. And then of course there are some children who either do not have the finances or who chose not to spend it on a common property. Others may have the money and chose to invest further in the said property.

Inevitably a time comes where some children would prefer the proceeds of the sale of a property instead of the burden of part ownership of an asset they do not want. There are siblings who do not want to sell. Siblings also often also lack the finances to buy their siblings’ share back.

And so the tension and conflict starts, escalates and reaches a dead end, a stalemate. Family relationships are torn apart.

As an outsider I have seen the following factors play a role in the scenarios above:

  • A history of distrust among siblings and even distrust of a parent
  • Economic and financial pressures
  • Perceptions e.g. a perceived lack of fairness or favouritism
  • Stress
  • The impact money has on our lives

Each of these can have an enormous impact on our ability to co-operate or resolve matters amicably.

So today I want to encourage parents to think very carefully about the following:

  • Do you have a will and are all your investments and assets well documented?
  • Communicate the content to your spouse and children at a family meeting
  • Simplify your investments
  • Reflect on the impact of appointing one of the children as executor, clarify this with the other children
  • Leave an uncomplicated estate or one that is fair

It is easy to have the attitude that it is not your problem. But if you were witness to the devastation caused in so many families, you would consider ways to minimise the risk of it happening in your family. Do not be naive enough to think it will not happen in your family.

Posted in Money, Relationships.