Column: How to keep peace when dividing family estate
December 15, 2010
Cincinnati.com: DECEMBER 15, 2010 BY LAURA RAINES
There is no doubt that the death of a family member, especially a parent, is a very difficult and emotional experience. Not only do families have to come together to make arrangements for a funeral and/or memorial, they also have to deal with the delicate task of dividing their loved one's personal items.
While it is often challenging to think about, the time to start thinking about the future of your estate is now. The earlier you have a plan in place the more time you have to openly discuss and explain the division process with your family.
There are five important strategies to keep in mind when creating your legacy plan:
1. Have an open discussion about family heirlooms and keepsakes. From your silver to a family vacation photo album, this is a great opportunity to find out what items hold sentimental value to your child, grandchild, etc. You can also make sure others are comfortable with your decision to bequeath certain possessions to a certain person.
2. Be specific about financial inheritance. Whether you have a family business, multiple properties or other investments, work with your estate planning lawyer to determine a method for dividing these items. Establish an estate plan to put into action. Keep in mind that the value of your assets will change over time. For example, determine what percentage you will leave behind to your children, grandchildren, friends, charity, etc., or if the entire estate will be divided evenly.
3. Name an executor. While many parents often select their oldest child to manage the estate, he or she might not be prepared to handle emotional disagreements that may arise. Selecting one child over another may also cause more friction. Consider an outside resource, such as a bank. This will relieve one of your children from having to say "no" to siblings.
4. Think it through to avoid legal battles. It's hard to imagine your children or relatives fighting over their inheritance, but in some cases the division of the estate has led to lengthy battles in court. Once you have a plan in place review it each year with your adviser and make necessary changes. Ongoing planning and preparation will reduce the number of disagreements down the road.
5. Involve a trusted financial professional. Schedule a meeting with a financial planning expert to start implementing strategies that fit your financial situation and plans for the future. Let the expert help you determine the best way to create a meaningful estate plan for all the important people, organizations and causes in your life.
Laura Raines is an Indian Hill resident who is a senior wealth relationship adviser with a local bank.