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Feuding over the family fortune

By Jennie L. Phipps · Bankrate.com
Tuesday, June 18, 2013
Posted: 3 pm ET

Estate planning is an important part of retirement planning. Do it wrong, and the loved ones you leave behind will almost certainly be hurt and angry.

Attorney Ronald Fatoullah, who specializes in wills, trusts and other legal and financial challenges of retirement, puts these three issues at the top of the list of potential conflicts that can tear your family apart after you die.

Leave nothing to one child. "It isn't about the money," Fatoullah says. "It's about feeling loved and appreciated." Even if you have one child who has $100 million and doesn't need a penny more, leave him something he will see as valuable -- "a little money and some of the mementos," he says. Otherwise, you are setting up a situation where this adult child, who feels unappreciated and unloved, will never speak to his siblings again and may potentially launch an expensive legal challenge.

Avoid compromising. Leaving a valued possession to one offspring when another wants it badly is a recipe for conflict. Instead, work it out before you die. For instance, one of Fatoullah's clients had a beautiful diamond ring that both of her daughters coveted. Nothing else would do. Her solution, which Fatoullah applauds, was to ask the daughters to share the ring. The will specified that on Jan. 1 each year, the ring is to move from one daughter to the other. Upon the death of the second sister, the ring is to be sold and the proceeds split between the daughters' offspring. The agreement was reached while their mom was still alive, and so far, Fatoullah says, it is working beautifully.

Leave your end-of-life wishes open to dispute. Don't just sign a health care proxy and forget it. If your decision was made long ago, that is a reason for your offspring to fight over your care. Instead, say early and often what you want to happen if you get sick and can't make decisions for yourself. Better yet, make periodic videos -- at least every five years -- and share them, so there can be no doubt.

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