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Avoiding Family Feuds
The bloody feud between the Hatfields and the McCoys ended well over a
century ago, spanned two decades and resulted in a dozen deaths in and
around the Appalachian area of eastern Kentucky. This famous
inter-family feud had all of the elements of a Hollywood drama. For more
information about this fascinating bit of Americana visit www.real-mccoys.com
or www.hatfieldsandmccoys.com.
While the Hatfields and the McCoys may have
settled their differences long ago, intra-family feuds are rather common
these days following the death of a family member. That fact was
confirmed in a survey conducted by the AARP/Scudder Investment Program
(the survey) of Americans age 50 and over. According to the survey, 20%
of the respondents cited problems among surviving family members due to
their inheritance, or lack thereof. Oftentimes these feuds are over
tangible personal property and family business interests.
Tangible
Personal Property
The survey made an interesting discovery:
cash is the most prized asset over which family members fight, but
tangible personal property (e.g. heirlooms like antiques and jewelry)
came in a close second. In fact, respondents reported that such property
accounts for 47% of the feuds, followed by personal residences at 43%,
other real estate at 31% and other investments at 11%. Fortunately, the
laws of most states provide a flexible solution for the specific
distribution of tangible personal property.
As part of your estate planning, these states
authorize a separate writing to be made on which you list the specific
items and who is to receive them. In most instances, this writing may be
handwritten, but it must be signed and incorporated by reference within
the estate planning legal documents themselves. A little time spent
preparing this writing now as part of your overall planning can help
thwart problems later.
Family
Business Interests
Did you know 90% of all U.S. businesses are
family-owned or family-controlled? They represent one-third of the elite
Fortune 500, generate one-half of the U.S. Gross National Product and
pay half of the total wages earned in this country. Despite all of
this...only one-third survive their founder. Although federal estate
taxes can be blamed for part of this dismal survival record, family
feuds are as likely the culprit.
For example, will your surviving spouse
continue the business or will they sell it? Who will buy it? Will any of
your children take over the reins and, if so, will they buy it or
inherit it? If they inherit it, how will the inheritance of your other
children be equalized? Are there any in-laws who could become out-laws,
just to stir up trouble?
As you can see, there are intra-family issues
that can cause a family business to run aground. Only by carefully
coordinating your personal estate planning with your business succession
planning can these issues be resolved before they arise.
Final
Note
Not surprisingly, the survey found that of the
respondents reporting no conflicts over an inheritance, 63% said they
had known what to expect ahead of time, with 82% believing their
inheritance was fair. In short, intra-family communication and proper
estate planning can help prevent family feuds.
This
publication does not constitute legal, accounting or other professional
advice. Although it is intended to be accurate, neither the publisher
nor any other party assumes liability for loss or damage due to reliance
on this material.
Copyright © 2004 by Integrity Marketing
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