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Writing a good will

Where there's a will, there's a potential battle.

Sometimes something as small as a crystal vase can expose a big crack in family unity. The best way to diffuse the situation? Talk to your family now, let them know who is getting what -- and why.

"Our experience has been that children tend to equate equality of inheritance with equality of love," says Jon Gallo, a principal in the Gallo Institute, a consulting service for families dealing with the psychological and emotional issues of estate planning. "And parents need to understand that. I tell our clients, if you are going to treat your children differently, even for good reasons, you need to convey that you love them equally."

First, make a will
When it comes to family harmony, that alone is one of the biggest steps you can take. You can distribute your property the way you'd like and eliminate guesswork by others. You're also making life easier on the people you leave behind.

 

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At its best, "It's to be a peaceful vehicle where there are no conflicts or fighting," says David Bendix, of The Bendix Financial Group, in Garden City, N.Y.

If you want to keep infighting to a minimum, tell everyone what's in your will and estate plan. Make sure the language is clear and keep the paperwork current. A 20-year-old will that mentions one grandchild but neglects three others or financially favors a younger sibling who hadn't then finished college will leave heirs scratching their heads.

Reassess the value of assets
Things change in value. What might have been an even split two decades ago could be a much different equation now.

And make designations for 401(k)s and IRAs, says Chris Farrell, host of "Right on the Money," a nationally syndicated personal finance show. "These days, a big chunk of your assets are not in your will," he says. And if you have a sizable estate, it makes sense to bring your financial planner and your lawyer together, Farrell says.

When you inventory your property, look at the way the assets are titled, says Alexander A. Bove Jr., a Boston-based attorney and the author of "The Complete Book of Wills, Estates & Trusts." Many people assume that property or money in the bank will all become part of their estate. But if you own the property jointly with another person, or you put your child's name on a bank account, the asset will pass to that person alone, says Bove. "That's why an inventory is so critical."

In most cases, you probably want to have a lawyer write your will, especially if there are minor children, second marriages or assets vital to your family involved. A lawyer who specializes in wills and estates will present questions and solutions that you're not likely to consider.

Review your will every couple of years as circumstances change. People "have to keep their wills living, breathing" documents, says Les Kotzer, a Toronto wills and estates lawyer and co-author of "The Family Fight: Planning to Avoid It."

Make the language clear
Rather than say you want something equally divided among all your children, name the children so that no one is accidentally included or excluded in this era of blended families. And be just as specific when it comes to naming your belongings. Read the will. If anything could be interpreted more than one way, have a lawyer revise it, says Kotzer.

He remembers two siblings who were split over a 40-year-old clock. The mother left all her antiques to her daughter and all other possessions to her son. The son wanted a 1960s clock from his childhood room. Was it an antique or not? Neither could agree and they haven't spoken since.

First among equals
There are plenty of reasons you might leave more to one person than another. If you talk about it ahead of time, everyone has a chance to understand your reasoning.

"Boiled down into one word -- communication," says Farrell.

Perhaps one daughter was your caretaker 24/7 while you were ill. Or one child is a single millionaire while another is a struggling social worker with kids.

Gallo suggests being up front and talking it out. Open the conversation with, "What would you feel if I did this," he suggests. "Or, 'I'm thinking about doing this because your brother or sister has greater financial need than you, but I'm concerned you'll feel punished if I do this.'"

If you don't even want to go there, there are other ways to handle it. First, you could help one sibling quietly while you're alive, in essence disbursing what you would have anyway, says Patricia Schiff Estess, author of "Money Advice for Your Second Marriage."

Or, you can arrange for an insurance policy for that person, says Schiff Estess. Since insurance passes outside the will, no one but you and your inheritor ever needs to know.

If the heirs are young adults and the money is for something specific, such as a home or college education, consider leaving the money in a trust set up for that purpose.

A trust also can be a good strategy in situations where you might not want to gift a person with a lot of money at one time.

But if you take that road, "Name a neutral third-party as trustee, not another sibling," says Gallo. And talk about the issue in advance.

If your children are young, you need a guardian. "There's also been a big shift in the way people approach guardianship," says Farrell. "A lot of people are beginning to separate out who they want to raise their children and who they want to administer their children's money. "

If anything in the will is liable to be controversial, like leaving a trust for an adult son with a gambling problem, many professionals recommend a non-contest clause. Enforceable in most states, this says that if the person challenges the will, they lose their share, says Bove.

These are a few of my favorite things...
In many cases, little mementos cause more trouble than big money. "There's bitter warfare over personal things," says Kotzer.

When it comes to personal items, take each heir aside and talk about what things have meaning for them, says Eileen Gallo, a principal in the Gallo Institute and a Los Angeles-based psychotherapist. Some relatives -- especially adult children -- don't want to think about it. Gallo remembers when her own mother approached the topic. "It seemed creepy," she recalls.

What if two people want the same thing? Let them know about the problem and suggest they work it out.

When it comes to the larger items -- like a business or a home -- convene a family meeting. "If you feel too uncomfortable to be leading the meeting, then you need to bring in a facilitator," says Jon Gallo, also a partner in the law firm of Greenberg Glusker Fields Claman Machtinger & Kinsella LLP. "People shy away from any confrontation."

Try to get a sense of how each party views the asset in relation to his or her own future. Is a daughter planning to run the business some day? Does a son want his kids to spend summers at the family homestead?

With a home, it's possible that one of the children might still be living there. What happens to them if you give equal shares to the siblings? Are they really willing to let the sibling live there while they pay the taxes and leave the equity untouched?

Bottom line: it's your asset -- listen to your gut. You don't have to do what the majority thinks is fair.

It's difficult when an estate involves the family business, because while all parties are family, chances are only some of them are involved in the business. "It's rare for a family business to survive the death of the founder," says Jon Gallo.

Talk to the parties involved, make your decision and talk to them again so that everyone knows what to expect. Some parents dodge the issue, figuring it's easier not to deal with the emotions face-to-face.

But Schiff Estess thinks that's a mistake. "Once the will is read, there is no way to clear up those expectations," she says. "And ill will is the legacy, as opposed to anything material or well-meaning."

Love the second time around
After a second marriage, don't assume your spouse will take care of the kids from the first marriage, says Kotzer. "I've seen stories where the kids from the first marriage lose everything to the second spouse."

Go over the property and asset issues when you draw up the prenuptial agreement and reflect the same wishes in your will and estate plan, says Farrell. Tell both families exactly how the assets will be split.

And it doesn't have to be an either/or situation. Trusts have tremendous flexibility and can allow a second spouse use of property while ensuring the asset will eventually belong to your own heirs.

First things first: Enjoy yourself!
If your kids are grown, your financial obligation is over. "No one has the right to an inheritance," says Farrell.

So don't be afraid to do what you want and use your money to make yourself happy.

Kotzer remembers one client who made a will prior to a serious surgery that she did not expect to survive. When she did, she threw a party and invited all of her nieces and nephews. Later, bending to retrieve an earring, she found a piece of masking tape with a niece's name on the underside of her dining table. She later discovered similar tags on most of her household possessions. Her heirs had used her welcome-back-to-life party as a chance to stake their claims.

The next day she went to a lawyer, changed her will -- and left everything to charity.

-- Dana Dratch is a freelance writer based in Atlanta.

-- Posted: April 6, 2004

 

 

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