Sibling Squabbles: Fair Estate Distributions To Multiple Beneficiaries

Avoiding Disputes Over Mom’s Money

Every parent worries about creating fair estate distributions for their heirs. The American Dream is as iconic as it is commonplace; you retire after years of hard work; you carefully plan to pass on your legacy to the next generation. Unfortunately, transferring wealth is rarely easy, especially if you have more than one child.

By 2030, baby boomer women will be stewards of the most significant wealth transfer in human history. For many of these women, child-rearing takes center stage in their adult lives. Later on, they worry about squabbles and resentment over fair estate distributions. Mothers may want to manage their asset division so the distribution seems fair from their perspective.

A 2022 survey by IBB Law found that inheritance disputes are common and most likely to occur among siblings. Transferring wealth between generations is nuanced and confusing when an estate has multiple benefactors. Women want to avoid strife between family members already stressed by losing a loved one. Open, honest dialogue sets expectations for the future.

Talk It Out: Fair Estate Distributions Avoid Rivalries

The most effective way to reduce potential rivalries is to discuss those decisions as a family before the transfer. Consider holding family meetings to discuss the values and desires that everyone shares.

It may be appropriate to invite adult children to meetings with the financial advisor. This can help build a relationship and trust before the transfer of wealth takes place – allowing the family to feel more comfortable and confident in the advisor’s role in how the estate is currently being handled. Yes, conversation about mortality is difficult, but it ensures a seamless transfer of assets.

A note to advisors: Approach financial transactions professionally and impartially when planning or executing an estate. Your clients already trust you, and your credibility underscores a calming, authoritative direction. Listen to your clients and show them the best strategies to meet their wants and needs. Be sensitive to the family dynamic, offer suggestions on how to approach the topic with the children, and encourage the family to have an open dialogue.

Two Common Bumps in the Road

Keep in mind that every family dynamic is unique, and siblings respond differently to different situations. Still, there are contentious issues that hamper fair estate distribution:

1. Parents may divide assets based on perceived needs. A parent’s analysis may not align with the child’s perception of their own needs. One sibling may be more financially successful; another may have less money than the rest. There is no guarantee that the wealthy individual would concur with a larger share going to their sibling.
2. What about dividing the estate right down the middle? Believe it or not, equality spurs discontent, too. If one child feels they put in more time, effort, and money caring for their ailing parents, are they more entitled to a larger share?

Tips for Diffusing Inheritance Disputes

When it comes to fair estate distribution, the best way to head off potential setbacks is to face them head-on. Explain your motivation and thoughts clearly to your advisor and your children. Give your children space to share their concerns and opinions with you as well. Consider what kinds of assets you have. Jewelry, family heirlooms, and other tangible assets hold sentimental value; therefore, think about how your heirs can help decide those distributions.

Some families encourage adult children to talk with each other well in advance about tangible treasures. You might choose to write a letter or record a video to accompany your will. An oral will may not be legally binding, but it can reassure heirs about your reasoning and intent — it’s a friendly reminder, reinforcing your last wishes.

Plan Ahead for Fair Estate Distribution

Sibling squabbles over inheritance can damage family dynamics. Careful planning and constructive communication about asset allocation eases the transfer of wealth and eases the minds of aging women who are invested in their family’s well-being.

We think you’ll also like:

1. Surviving the Second Generation: Discussions You Need to Have Before, During and After Family Business Transitions
2. The Good, The Bad, and The Ugly Truth of Retirement Savings
3. I’m Not Very Wealthy, Should I Still Make a Will?

[Editors’ Note: To learn more about this and related topics, you may want to attend the following on-demand webinars (which you can view at your leisure, and each includes a comprehensive customer PowerPoint about the topic):

1. Structuring and Planning the M&A Transaction
2. Handling the Arbitration
3. Conducting the Mediation

This is an updated version of an article published on October 4, 2017, and updated on October 10, 2022.]

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