{"id":36400,"date":"2023-07-16T11:46:46","date_gmt":"2023-07-16T15:46:46","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/a-will-can-split-a-family-how-to-avoid-the-hurt\/"},"modified":"2023-07-16T11:46:48","modified_gmt":"2023-07-16T15:46:48","slug":"a-will-can-split-a-family-how-to-avoid-the-hurt","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=36400","title":{"rendered":"A Will Can Split a Family. How to Avoid the Hurt."},"content":{"rendered":"<div id=\"js-article__body\" itemprop=\"articleBody\" data-sbid=\"WP-BAR-0000693398\">\n<div data-layout=\"wrap\n              \" data-layout-mobile=\"\" class=\"\n        media-object\n        type-InsetMediaIllustration\n          wrap\n  article__inset\n        article__inset--type-InsetMediaIllustration\n          article__inset--wrap\n    article__inset--lead\n  \"><\/p>\n<figure class=\"\n        media-object-image\n        enlarge-image\n        img-wrap\n        article__inset__image\n      \" itemscope=\"\" itemtype=\"http:\/\/schema.org\/ImageObject\"><\/p>\n<div style=\"padding-bottom:66.66666666666666%;\" data-subtype=\"photo\" class=\"image-container  responsive-media article__inset__image__image\"><\/div>\n<\/figure><\/div>\n<p>Parents may have the best intentions when dividing up assets among their children, but it\u2019s easy to cause rifts between family members if it isn\u2019t done right. <br \/>Financial and estate planners say parents often can head off problems while they are still alive by discussing the aims and intentions of their estate plans with their children. The key isn\u2019t revealing dollar figures; rather, these conversations allow parents to set expectations for their children.<br \/>This isn\u2019t a solution for all families. Many parents fear they will be opening a can of worms by even talking about estate plans. \u201cThey don\u2019t want to initiate conversations with their children in the belief that an open discussion can give rise to more questions than maybe the parents want to answer,\u201d says Nancy Hearne, partner in the personal wealth, estates and trusts practice division at Saul Ewing Arnstein &amp; Lehr. <br \/>Brian Tees, managing principal at Ewing &amp; Jones, specializing in estate planning and probate, says he errs on the side of parents speaking to their children about estate planning, but says he understands why parents decline to talk. Instead, he says some of his clients include side letters in their wills that aren\u2019t part of the legal document, explaining their intentions.<br \/>\u201cYou get to provide some context. It\u2019s a final message to that child,\u201d he says.<br \/>No matter the size of a family\u2019s wealth, parents should take care to limit strife. Here are three situations where problems are particularly likely to crop up.<br \/>\u2022 <strong>Trying to be fair when assets aren\u2019t equally distributed<\/strong><br \/>Parents who give more assets to one child over others may be able to limit misunderstandings if they explain their reasons in advance. Hearne says it\u2019s particularly important that parents emphasize to their children\u00a0any unequal\u00a0gift amount\u00a0isn\u2019t made for lack of affection for children who receive less.\u00a0<br \/>\u201cOne guiding principle for parents to follow is to make all children feel they\u2019re equally loved,\u201d Hearne says.<br \/>Tees says he\u2019s currently working on an estate plan where parents already gave one child $200,000 for a house down payment, so the parents have explained why the other children will receive an additional $200,000 each before dividing up the rest of the assets.<br \/>Last year he created an estate plan for another couple who have three children, a son who is a wealthy doctor, and two other children of more modest means. The parents planned to give 20% of their estate to the doctor, and 40% each to the other children. The parents explained their decision in advance to their son the doctor, who in turn asked his parents to give him even less money, Tees says.  <\/p>\n<p>It doesn\u2019t always work out that way, he says, as some children see a lesser inheritance as a punishment for being successful. Parents who expect significant pushback from a child who will receive an unequal gift and want to avoid fights while they\u2019re alive may be better off including a letter of intent in the will.<br \/>\u2022 <strong>Dividing up unique property<\/strong><br \/>Krysta Dos Santos, head of financial planning at GenTrust, says sometimes parents know which unique property their children want and may not require additional communication. She said a couple she worked with evenly split their liquid assets between their son and daughter, and left their son a classic car and their daughter received her mother\u2019s jewelry. Neither was surprised at the gifts, but it could have easily gone the other way.<br \/>She worked with another family who left a summer house to one child and an investment property to the other child of rough equal monetary value. The child who received the investment property was upset. \u201cThis child had so many fond memories at the summer house that they would have very much preferred to receive that property as there was so much sentimental attachment\u2014or even split both properties with his sibling,\u201d she says.<br \/>With unique items, she says some families use sticky notes to tag favorite heirlooms. If a piece has more than one sticky note, then the family should have a discussion., she adds.<br \/>\u2022 <strong>Not properly protecting children\u2019s inheritances in blended families<\/strong><br \/>Parents who have children from previous marriages need to take extra care to ensure that their children are protected financially. Without proper estate planning, stepchildren can be disinherited once a parent dies. Children should be clued into these provisions, the sources say.<br \/>Separate wills for each spouse can add a layer of protection, particularly \u201ccontractual\u201d wills, Tees says. In these wills, each spouse agrees that the surviving spouse doesn\u2019t have the legal right to execute a new<br \/>will that cuts out the children of the deceased spouse.<br \/>Dos Santos says her clients sometimes use a qualified terminable interest property trust, which allows an individual to leave assets to a surviving spouse along with specific instructions to pay out the remaining assets upon the surviving spouse\u2019s death. The surviving spouse doesn\u2019t have the ability to<br \/>make changes to how the remainder is paid out, she adds. She recommends having a corporate trustee in charge, rather than a family member.<br \/>However, having trusts pay out to children after a surviving spouse dies can be awkward for everyone, especially if the surviving spouse is much younger. Dos Santos says one client who remarried a woman close to his children\u2019s ages decided to set up large life insurance policies for his children, rather than a<br \/>trust.<br \/>\u201cThis way his wife could maintain all their existing assets\u2014home, bank account, retirement accounts, investment accounts, etc. and the children would still receive a very healthy lump sum payout from the life insurance,\u201d she says.<\/p>\n<p>Write to editors@barrons.com<\/p>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.marketwatch.com\/articles\/will-family-rifts-2edb17da?mod=investing\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Parents may have the best intentions when dividing up assets among their children, but it\u2019s easy to cause rifts between family members if it isn\u2019t done right. Financial and estate planners say parents often can head off problems while they are still alive by discussing the aims and intentions of their estate plans with their [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":36401,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-36400","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>A Will Can Split a Family. 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