Can Your Heirs Work Together?

Creating a will and drafting trust documents are forms of “transactional law.” That means that, unlike litigation, the purpose is not necessarily to “win” in a conflict over another. Instead, the purpose is to put plans into place that explicitly avoids conflict down the road.

When doing this work it is critical to understand the details of the law to ensure documents are crafted and structured in ways that meet legal requirements and have the intended legal effect. But, in many cases, particularly estate planning issues, knowledge of the law alone is often insufficient to help prevent conflict. That is because, these issues are wrought with emotions. The interplay of family values, personal relationships, resentments, financial stress, and other matters are all wrapped up in the process. Working to prevent conflict therefore requires consideration of all of these issues in addition to simple knowledge of the letter of the law.

Feuding Siblings
Failure to take all of those factors into account is a recipe for family feuding in the aftermath of a death. For example, this week the New York Post reported about an on-going fight between two brothers over their father’s estate. The patriarch died nearly sixteen years ago (in 1998) and the mother died six years later (in 2004). The fighting is over a $13 million estate which was built from profits of a garment company which sold women’s lingerie.

According to a suit filed in a Manhattan Surrogate Court, the younger brother claims that his sibling embezzled more than $2 million from the estate to fund his lavish lifestyle. The son claims that millions were funnelled out of the estate, subsequently lowering his own inheritance. For his part, the older brother argues that all of the funds allegedly embezzled were gifts signed by their own mother before her passing.

This back-and-forth is far from uncommon. The roots of the feuding may be based in resentment from childhood, unbalanced relationships between parents and children, and many other factors. It is impossible to say with certainty what could have been done on the estate planning front to prevent this fighting. But simply “splitting the assets between the two sons” (as happened here) may have been too simplistic an option. At the very least, when potential challenges of this nature arise, it is important to explicitly list assets that are to go to each child, leaving no questions about whether lifetime gifts were to be factored into the inheritances. The less ambiguity the better.