At The Humphreys Group, we know how much our early personal experiences, family histories, and backgrounds can affect how we view money in adulthood. This is especially true when it comes to handling family inheritances.
Sibling Dynamics and Family Inheritance
Let’s say your grandparents tended to show favoritism toward your older sister. Or your brother got a new car for his sixteenth birthday, and you didn’t. Or your parents always went to your sister’s soccer games, but not yours. This longstanding sibling tension and resentment can play itself out in family inheritance discussions.
As Amy Castoro, a family wealth coach and president and chief executive of the Williams Group, aptly said in the New York Times, “So if one son is designated as the executor of a parent’s estate, the other son or daughter are looking at him saying, ‘That guy cheated at Monopoly our whole life. Why would I trust this guy now?’”
In a 2019 TD Wealth survey, nearly half of estate planning experts identified family conflict as the biggest threat to estate planning. Designation of beneficiaries was the most common cause of conflict. Other sources of conflict included not communicating the plan with family members and working with blended families.
How Gender Plays a Role in Family Inheritances
At The Humphreys Group, we also know that family conflicts can arise from issues related to gender, too.
Parents might have gender biases around who manages the inheritance or legacy, thinking their sons are more up to the task. But, as we’ve noted in our eBook Rewriting the Rules: Telling Truths About Women and Money, women are smart and responsible with money, and they have the financial confidence and insight needed to be a trustee. Unfortunately, these gender biases and unfair treatment can start when we’re young. Several studies reveal jarring differences in the ways parents talk about money with their sons vs. their daughters.
But it doesn’t just stop at hidden gender biases. Women are also more likely to be their parents’ caregivers, and it can be frustrating when they don’t see their unpaid caregiving work reflected in their parents’ inheritance plans.
Tips On Navigating Inheritance Tension
So how can family members navigate these challenges? Here are some tips.
1. Parents should clearly communicate their plan. Why do most generational wealth transfers fail? It’s often because of poor communication. Don’t leave your arrangements a surprise until your death. Have a family meeting — quarterly or annual meetings — so your family members completely understand how much of the wealth they will or will not receive. Explain what you’re trying to accomplish with your estate plan.
2. Listen to each other and respect one another. This applies to both the heirs and the executors. Listen, don’t interrupt, don’t be judgmental, and try seeing things from their point of view.
3. Parents should draft an estate plan. If you pass away without a will, then all the decisions are left up to the state in which you reside. By drafting an estate plan, you can ensure the assets are divided the way you want.
4. Hire a financial advisor or other professional to mediate and facilitate these conversations. With an unbiased, objective financial advisor involved, you will be able to create a broad plan that covers everyone’s concerns.
5. Revisit your plan. It’s important to revisit your estate plan when there’s new tax legislation or a change in your family situation — such as a birth, death, marriage, or divorce. Keep everyone up to date on these changes.
Want to further discuss how to navigate difficult conversations about estate planning? Reach out to our team today, or attend one of our Conversation Circles, where we have authentic, personal conversations about money — beyond the numbers.