If you know the game show ‘Family Feud’ there are winners and losers. Similarly, when it comes to family feuds over family wealth there will be winners and losers but with devasting effect, tearing families apart.
With my recent client, whose names have been changed for anonymity, such devasting effect can’t be understated. This brings into focus the importance of ‘Family Inclusive Estate and Succession Planning’ and having family conversations about your estate plan are just as important as the plan itself.
Facts
Dave and Mary are farmers conducting their farming business across several rural properties. Of their five children, Brett was the only child to work alongside his parents in that faming business.
A property called ‘Pandora’ was to be gifted to Brett by his parents and was described as Brett’s ‘early inheritance’. However, Brett did not want to wait until Dave and Mary’s death to get ‘Pandora’. Dave was not ready to hand over ‘Pandora’. Both Dave and Brett had different views and goals for ‘Pandora’. This left Brett frustrated and angry, leaving Brett feeling that Dave may not give him ‘Pandora’. This caused a rift between Dave and Brett and their relationship became strained to the extent that Brett sought legal advice as to how he can get ‘Pandora’ from Dave and Mary. Ultimately, Brett took legal action to obtain ‘Pandora’ in the Courts.
After several years of fighting in the Courts and Dave spending more than $800,000.00 in legal fees, Dave was ordered to hand over ‘Pandora’ to Brett. Dave was left heartbroken by Brett’s actions which tore their family apart and Dave no longer considered Brett to be his son, let alone wanting anything more to do with Brett.
Dave and Mary are now in their 90s, and still hold significant wealth which they now want to give to their remaining 4 children. Dave was adamant in his instructions that Brett shall not receive anything from their estate. A concern for Dave was that if he died first, then everything would be left to Mary. Dave was concerned that Brett still had influence over Mary.
As I took Dave’s instructions, it was clear that Dave still very much loved his son Brett and was left devasted by Brett’s actions. The saddest part about this, was that even though Brett succeeded in his claim to get ‘Pandora’, Dave told me with tears welling up in his eyes that Brett would always get ‘Pandora’ no matter what happened.
This is a depressing example of a family feud having a ruinous and devasting impact.
So, what is the lesson?
Carefully planning for the transfer of your wealth during your lifetime and upon your death is part of your legacy. You don’t want to leave your family in a costly court fight because your estate plan didn’t consider the needs and expectations of your family members. Although the conversations with your family about your estate planning can be uncomfortable, they are critically important.
Most people will have a similar horror story like Dave and Brett where family feuds end up destroying families and impacting generations. It is not merely the financial burden of the litigation, usually family relations become embittered, unlikely ever to be repaired.
In Dave’s case, one can see the seriously adverse health and mental consequences Dave has suffered as a result of Brett’s proceedings. One also attributed a relationship breakdown to the pressure of the proceedings.
Going to Court to argue over family wealth inevitably leave families broken and often mean that someone’s hard-earned inheritance is lost paying huge legal bills.
As lawyers who help families hold these conversations – I can’t help but wonder whether Dave and Brett could have been spared the financial and emotional pain, if Dave and Brett had documented what was to happen including with ‘Pandora’.
Traditional succession planning usually involves preparing a Will and other documents to set out what you want to happen with your wealth and when you die. But often that planning is done in a vacuum of information, guessing at what each beneficiary’s financial and other circumstances might be, and hoping that the plan is perceived as “fair” without asking family members.
Family Inclusive estate and succession planning using a collaborative process meaningfully involves your family members in the planning process, helps you hold the important conversations constructively and resolves differences between family members by crafting planning solutions that are understood and accepted by all.
If your clients don’t want to end up like Dave and Brett and wish to consider a more holistic approach to their family legacy planning, so that families are spared the heartache and the financial cost of litigation, PV Legal can help families through a family inclusive estate and succession planning process to prevent future conflicts and family feuds.
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