How to avoid a family feud over an estate
Interview with Jenny Seaton
How many times have you heard about a family feud erupting over the spoils of an estate? Once the family figurehead is gone, relationships can break down as the kids squabble over who gets what. Nobody wants this outcome, so how can you avoid it?
- Determine how would you like to be remembered. Don’t allow others to shape your legacy after you’re gone.
- Spend time planning, seeking advice and documenting your wishes.
- Get the support of your spouse or partner in formulating the plan and present a united front to the family.
- Discuss the plan with your family so they understand your objectives and are clear about the outcomes and the reasons for them. Be remembered as the person who looked after everyone they loved and cared about, rather than the person who left them in uncertainty and doubt that blew the family apart.
Transcription
Jenny: So, how do we avoid a family feud over an estate, and how many times have we heard about a family feud erupting over the spoils? Often once the family figurehead is gone, relationships can break down as the children squabble over who gets what, and nobody wants this particular outcome. So how can we avoid it? Joining us now is Michael Grant, a strategic legacy planner for successful business owners. And a very good afternoon to you Michael. Thanks for joining us.
Michael: Good afternoon, Jenny. Pleased to be on the show.
Jenny: Well, it’s nice to have you here because you’re the man that can solve these things, and you’ve probably heard it all.
Michael: Yes, it’s something that crops up a lot unfortunately, especially when there hasn’t been good communication amongst the family and they’re surprised at the end. Those who are surprised probably are unpleasantly so. They take drastic action to try and correct it and then that becomes a rather unpleasant mess.
Jenny: It does. Because it doesn’t cheapen the person’s life that has passed, but it brings out the worst in people. Not on every occasion, but—in this particular instance we’re talking about—it definitely does. And you can’t take words back. You can’t take back what then happens if it ends up in court.
Michael: That’s right. And the unfortunate result of taking things like this to court is that it becomes something that creates issues. “I’m in the family, but yeah, probably never be paid.” And you get people not talking to one another ever again. Then it goes down the next generation; cousins not talking to cousins. It’s very sad.
Jenny: But you’ve got to be able to look at all sides of an issue, I suppose. So when do people come to see you, for example? At what point?
Michael: Well, I try to get early interventions; that’s the best cure for these sorts of things, to the extent they can be cured. I tend to talk to people about what it is that they really want to achieve in the last 30 years of their life. Outcomes would be what is their preference, what is it that they really want to leave behind and handle? How do they want to look after the people they love and care about so much? So yeah, that’s the big question and it gets people thinking, and if people actually do address that question we can sort of build off a thing I call a legacy plan., When you then start to involve the members of the family in the plan and they’re getting engaged in it and get a chance to have a say while you’re around.
Michael: Then what tends to happen is you build up mutual trust and respect and so at the end hopefully you get a family that basically accepts the outcome and says, “Well, this is what Mom or Dad or both of them wanted. Look, it might not be perfect, but you know, it’s about compromise and you know, it is what it is and we all accept what it is and move on.” Now that’s the ideal outcome.
Jenny: Well you have to accept what the wishes were of the person that’s left something behind. But just going back on doing something in the early stages—you’re suggesting that you involve the family when you make out the wills..?
Michael: The wills are just one part of what I call a legacy plan. A will is just documenting part of an outcome. What we’re really talking about here is working out what someone wants to achieve in what I call the last trimester of their lives. And that sounds a bit final, but really we’re talking about people living to their eighties and nineties these days and some retired at 60. So there’s 30 years of thinking and enjoying yourself and doing different things and maybe letting go of the reins of the business and letting others come through. Some [family members] have trouble with that as well. So part of the legacy plan is to allow the next generation through in a structured and educated way so that there isn’t this power battle—not just about what happens with the will, but also who takes over the reins of control at that point.
Jenny: Okay, I wasn’t aware of what a legacy plan actually was. So you’re suggesting before you make a will many years in advance that you sit down and think carefully about where you would like things to go before you make the will?
Michael: Absolutely.
Jenny: Okay. Okay.
Michael: Look, just think about where things are going to go. It’s really about what you want to get out of your life and then the next step is to talk to your spouse or partner and get them involved in it. You know, when you discipline kids when they’re little, they’re on the same page, then things generally get done the way that you want.
Jenny: So do they put this in written form?
Michael: I take the view that what gets written down gets done. If it stays in your head, it usually ends up staying there. Once you actually document something, you can see it on the page, you see? That’s really where we want to go here—then you can start sharing that with people, and what I do is to help people with that process.
Jenny: So somebody would come to you at any age I suppose. You mentioned a young family, what you would like to get out of life financially and you know, fulfillment and that sort of thing. So you put it in writing it, is that what you’re saying?
Michael: Generally speaking, it’s not normally the younger people, I’m talking people in their fifties and sixties normally start to think about these things because they’re starting to think about how does the succession occur. We’re talking about people who have worked hard and created successful businesses and they’re still in charge, but maybe they don’t want to be in charge anymore, or maybe they’d like to step down a bit and still stay involved. And like any good plan, it needs to be documented and then tested and then worked on as a work in progress.
Jenny: So you have somebody like yourself, and you sit down and you’re with somebody who works out the next 20 years. It’s in writing. Does it become legal if they want to make changes to a company or no?
Michael: Well, to the extent that you actually put in place legal agreements. For example, a will is a legal agreement, but there are all sorts of things you need to think about—enduring powers of attorney guardianship. How do you actually make sure your company constitution works when you’re gone? Who becomes the new directors, who become, who controls the shareholders and so on. So there are lots of things to think about it well in advance. I try to coach people around facing up to the unpleasant things and that’s where trouble normally happens.
Jenny: Yeah. You try to put off the inevitable. That sounds like a great concept—you know, just planning ahead what you will do in that situation and what you want to achieve. And then you could perhaps share that with your family and the world.
Michael: That’s right. It’s the will in some respects that documents the outcome that you’ve shared with everyone. So when you’re gone and the will gets read, everyone says, “Oh yeah, that makes sense,” and we move on. I’ve had a fairly long experience now. I have 35 years helping people do this, and so this is all about bringing together the experience I’ve gathered and to start sharing it in different ways. It’s about avoiding these unpleasant confrontations and very expensive litigation.