Family conflict after a loved one has passed is very common, but that doesn’t mean it can’t be avoided. In our years of experience in estate planning, we’ve seen many different scenarios play out and have a thorough understanding of the nuances that tend to cause these conflicts. The number one reason for disputes over a trust lies in the feeling that it is not fairly divided. While Mom and Dad or Aunt Sally can set up their estate however they wish, often, a simple conversation with family can go a long way to clarify why certain decisions were made.
In this episode of Absolute Trust talk, we discuss the top three areas where the biggest issues arise: real estate, tangible possessions, and perhaps most importantly, who gets appointed trustee. We’ll also share relatable examples, easy-to-follow advice, and more to help ensure your estate plan is carried out peacefully and as you see fit.
Time-stamped Show Notes:
0:00 Introduction
0:49 While every family has their own unique situation, the number one reason people contest a trust or estate plan is because they feel they didn’t get their fair share.
2:52 Hiring a professional to act as trustee can have unexpected benefits for managing your trust. Here’s what you need to know.
3:50 Appointing a family member as a trustee can come with complications. Here are just two great examples.
5:15 It’s a common misconception that if you hire a third-party fiduciary, your children will have no say in anything. But that couldn’t be further from the truth.
5:50 Here’s an extra piece of advice: If real estate can be a point of conflict, write a provision to have your house sold after you’re gone.
6:51 There’s no question that family feuding over a loved one’s belongings is common. Here are ways you can mitigate it.
Transcript:
Hello, and welcome to Absolute Trust Talk. This is our podcast here at Absolute Trust Council. I’m Kirsten Howe, and Madison Gunn is here with me today.
Madison, what are we gonna be talking about today? We’re here to talk about how to reduce family fighting after you pass away. Oh, excellent. And Madison, by the way, Madison is kind of in charge of the after-death work that we do with our clients. So, she sees a lot of the conflicts that happen in families when a parent has died. We don’t do litigation, so if a conflict escalates to that point, we have to refer it to one of our colleagues. But we do still see the conflict happening – not all the time – but it happens. So this is a good topic for you.
So, okay, Madison, what do we wanna talk about first? Well, the first thing is, you know, obviously, you want to treat your kids equally, but you don’t have to. I mean, we understand that every family is different. They have their own – we don’t want to say issues but, – issues. So everybody has their own unique situations. So you can do what you want. But obviously, if you don’t treat your children equally, that is usually the number one reason why people contest a trust or estate plan. Right. But just to really reiterate what Madison said, you should do what you want. And if that means not treating your children equally, that is totally fine. That is just a situation that tends to result in conflict.
Okay, so assuming we have a family where all of that is taken care of, that children are being treated equally, what else can we do? Yeah, so the big thing is, everybody gets along until they don’t. So all the things that you can kind of do to ensure that they still get along are the things that you can do, you know, in your estate plan.
So the first one – a good idea might be to have a neutral third party as your trustee. So a private professional fiduciary as your trustee, which is a cool category of professional trustee in California. So they’re licensed fiduciaries that come in and administer the trust. Yeah. There are a number of different ways you can go with that. You can name a bank, you know, a trust department, a corporate trustee, or you can name a licensed private professional fiduciary.
The thing that’s nice about that is that they don’t have any history, they don’t have any family emotional things happening in the background. Whereas if you select one of your children, you don’t necessarily know what’s going on when you’re not around. You don’t know what their relationships really are like and you really don’t know who’s holding a grudge about what and what childhood incident had a lasting impact on whom. When you bring in a neutral third party, they don’t have any of that history and they’re just gonna get the job done.
And it really just goes a lot smoother with a professional who knows what they’re doing. They call us a lot less, which results in a lot less legal fees to the trust, which means the other kids are a lot less irritated with the cost ’cause it’s a lot smaller. So even though the fiduciaries might charge for their time, they’re a lot less expensive than the attorney’s fees that a child might rack up having to call all the time. That’s exactly right. And this is their job. It’s what they do all day from nine to five or nine to eight or whatever their hours are, they’re doing it. So things tend to happen a lot more quickly as opposed to your child who has a job, has kids, has a soccer team, you know, all the things. Conflict can be averted when things start happening and people start getting their money instead of waiting a year or two years for the trustee to start finishing up their job. Good point.
And, you know, naming a family member can be problematic. We’ve talked about very recently a case where there was – immediately on the death – there was litigation because of the trustee. Yep, on the death of Lisa Marie Presley, you know, her daughter, Riley Keough and her mom, you know, immediately went at each other and they were trying to be trustee of her trust. Priscilla. They immediately went at each other and it’s like, who wants that job? I mean, they want to be paid for the job. I understand that. People usually want – that’s what they want, but you know. And I think it’s also about control a lot of times. I want to be the one in control. I don’t want to be sitting there waiting and watching and hoping that it gets done.
And I was reading about Jerry Garcia and I didn’t know this, but I just recently read this, that on his death, he had named his third wife as his trustee. And she promptly, apparently, based on what I read, turned around and terminated the spousal support for the second wife. So, you know, that’s a clear example of family members with history and emotion rearing its ugly head and getting in the way of doing their jobs. It gets very complicated.
So it’s having a fiduciary involved as a neutral third party makes it a lot, just a lot smoother. I mean, at least if the siblings are annoyed with the fiduciary, they all band together. And so they’re a unified front.
And just to be clear, they get to be involved in decision-making. It’s not like the fiduciary steps in and decides who, you know. They clean the house out, they still involve the kids. They’re not in there just making all decisions on their own. They still involve the children. So it’s not like the kids don’t know what’s going on. It’s just that the fiduciaries are they’re doing the work. Yeah, that’s a very good point. The beneficiaries are always entitled to know what’s going on. So that is not a concern with a third party.
Okay, what other little nuggets of wisdom do you have to help families avoid conflict after the parents have passed away?
Yeah, so the biggest bane that I see is the house, the family home, particularly if it’s the home that everyone was raised in. So my favorite thing and what I like to encourage (I don’t, like, tell people what to do in their estate planning, but I encourage it if they’re not) if they’re worried about it, is to require that the house be sold in their estate plan. If they’re – in fact I had this yesterday – if they’re worried or they know that one daughter or one child is going to want the house, I will say we’ll give them the first option to buy it. But then at that point, you know, they have to figure it out at that point. But otherwise, you know, it’s gotta be sold. And it’s gotta be sold on the open market, not any of this pocket listing, backroom dealing, wheeling-and-dealing with their siblings, because someone’s going to get the raw end of a deal. And then there’s going to be ongoing grudges.
Yeah, so a lot of children fight over your stuff. And it’s not even the value of it. And the funny thing is, is like, my generation is going to fight over who doesn’t want it. And here’s this generation that’s going to fight over who does want it. And then going forward, everyone else is going to burn it down. Gen Z is going to burn it down. But, you know, they’re spending money – thousands and thousands of dollars over who wants it and they’re not fighting over, you know, grandma’s $30,000 ring. They’re fighting over the Precious Moments collection or the Vinyl collection or you know, things like that, things that have sentimental value. Sure, but they’re not worth anything. So I strongly suggest either having a plan deciding who gets what, talking about it with your kids in advance and writing it down who gets what, or just putting a plan in place for your trustee. It’s a Round-Robin. Each kid gets a schoolyard pick around, you know, what they get to pick out of the house and doing it that way. You know, something, at least a plan. Yeah, make it as fair, objective, and straightforward as you can.
And I would also say, make sure that, if this is appropriate, the trustee is authorized to donate or throw away anything that people don’t pick. Yeah, no one wants the 50-year-old linens. You don’t have to have a garage sale. You don’t have to have an estate sale. The trustee should be free to do what is in the best interest of the trust as a whole. You’re gonna spend $5,000 having a garage sale that nets $450. That makes no sense. So just be clear about that kind of thing. And it doesn’t take much to do that in your estate plan. It does not take hardly anything to do that in your estate plan. No.
So yeah, these are the things that we see the most conflict over the real estate, the tangible possessions, and the trustee. Those are probably the most common conflicts that we see among the siblings. And so, just putting a little more thought into it ahead of time can go a long way.
Anything else, any others? That is it. I think those are the big three. Those are the big three, yeah. Okay, thank you, Madison. This has been very fun, hopefully illuminating for our audience. And we are so glad that you were able to be with us today and we look forward to connecting with you next time.
Resources Related to This Episode:
- Absolute Trust Talk Ep. 127: Understanding Multigenerational Estate Planning Part 2: https://absolutetrustcounsel.com/127-understanding-multigenerational-estate-planning-part-2/
- Absolute Trust Talk Ep. 126: Understanding Multigenerational Estate Planning with Tess Brigham Part 1: https://absolutetrustcounsel.com/126-understanding-multigenerational-estate-planning-with-tess-brigham-pt-1/
- Absolute Trust Talk Ep. 106 – What’s Left of the Presley Estate? Lessons Learned from Elvis & Lisa Marie: https://absolutetrustcounsel.com/106-whats-left-of-the-presley-estate-lessons-learned-from-elvis-lisa-marie/
- Absolute Trust Talk Ep. 097 – Estate Planning Lessons from the Rich and Famous: https://absolutetrustcounsel.com/097-estate-planning-lessons-from-the-rich-and-famous/
- A Will is Not Enough – Securing Your Legacy with Estate Planning Life can change in an instant. A will is not enough to be prepared. Get free access to our actionable E-book Guidebook #1 and start protecting your legacy today. https://absolutetrustcounsel.com/guidebooks/
- Learn how to comfortably define gray areas and assess your own unique needs to effortlessly build a secure future now. Check out Guidebook #2, Estate Planning Beyond the Basics, here > https://absolutetrustcounsel.com/guidebooks/
- Get our free introductory guide to the most used estate planning tool, family trusts, and understand how we plan to help protect your family. Guidebook #3: https://absolutetrustcounsel.com/guidebooks/
- Absolute Trust Counsel would love to offer access to our Incapacity Planning resource page: https://AbsoluteTrustCounsel.com/Incapacity-Planning/. We’ve collected our top planning information all in one place so listeners can find videos, guidebooks, blog posts, and a host of information with tips and strategies on implementing, planning, and protecting themselves and their loved ones.
- We’re pleased to provide a library of e-books to address common estate planning questions and concerns in practical, easy-to-understand language. https://AbsoluteTrustCounsel.com/Resources/.
- ASK KIRSTEN: If you’d like Kirsten to answer your question on the air, please email her at Info@AbsoluteTrustCounsel.com.
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