Deciding one’s legacy

Whether reading about yet another contested celebrity will or comforting a friend caught in a family estate squabble, many of us have stumbled upon the conflictual residue of estate planning gone sour. To be sure, some grantors would be just as happy to learn of these post-mortem dramas; however, this is the exception. Most often, the difference between a grantor’s wishes for his/her estate and the actual legacy that results in family discord, is the unintended and tragically avoidable result of inadequate planning.

Much of the time, especially with young, healthy people, lack of planning can be a simple matter of administrative oversight or putting off something that seems abstract and nonpressing. It’s as easy to deny the importance of estate preparation as it is to deny one’s own mortality; focusing on estate matters forces us to confront death. Additionally, many parents, especially in affluent families, do not wish to discuss their estates with beneficiaries out of fear of how their heirs would respond emotionally and financially to knowledge of their inheritance.

Nor are people typically eager to look beyond finance and taxes to face some tough decisions. Such conundrums include how to treat in-laws, remarriage or children with special needs, mental illness or addiction. If adult children have varying family sizes, do you distribute equally among family branches (resulting in some grandchildren having less than others), or do you divide equally among grandchildren (risking potential resentments and conflict among siblings who feel unfairly treated)? If there is a family business, how should shares be divided if some children work in the business and some don’t? How much should be given to charity? How much is enough? Who should be the executor? The questions can get complex indeed. No wonder many wish to refrain from deciding or discussing these issues altogether or fear confronting heirs with their estate decisions. What many don’t consider, however, is the impact of avoiding this process.

Even in the best of circumstances, money can become a powerful emotional metaphor representing ideas about fairness, or the feeling of being loved, cared for or special. In grief this can become even more pronounced. If the decedent’s wishes are left to chance and/or not made explicit before death, a vacuum is created that can only magnify the situation, and survivors can react in unpredictable ways.

“The biggest issue is grantors not sharing decisions and explaining why they are made” said Rebecca Maggard, a tax accountant and wealth coach who advises clients navigating the technical and emotional complexities of family estates. Even in the best of circumstances, where family dynamics run smoothly before death, things can go terribly wrong if not properly spelled out.

“You never know what to expect,” said Maggard, who advises her clients to clearly articulate their wishes in writing and to their heirs to avoid post-mortem confusion and squabbles.

Even if the discussions are difficult, there is still the opportunity to work things out while everyone is still alive.

Ways to organize such discussions can range from informal conversations to more formal family meetings organized by outside trusted advisers versed in the complexities and dynamics of family estate planning. Such advisers can include financial, legal and tax advisers who look beyond finance and taxation, or family enterprise consultants who take a more holistic family-systems approach, working with the family to organize around decisions and to facilitate difficult conversations.

One of the tools Maggard uses to help clarify and transfer family values is an ethical will, the ancient Jewish custom of documenting the values that a person wishes to pass on in addition to financial wealth. Written ethical wills date back to medieval times, with an oral tradition as old as the Bible itself, in which Jacob expresses in Genesis 49 his wishes for his sons and for his burial. Clarifying values in such a way can also help resolve some of the thorny questions needed to shape legal documents and are a way to pass on to subsequent generations the family’s legacy of lessons learned, stories, advice, guidance and values important to them such as family, hard work, education and the family’s role in the community.

However it occurs, in order to create consistency between intentions and execution of the estate plan, decisions have to be made, written down and clearly articulated to the beneficiaries. While the task may be challenging for some, engaging in this process can be about more than just the financial component of wealth; it’s also an opportunity to decide the legacy of values you wish to transfer and to have that legacy carried on.

Ilene Weingarten is an associate with Relative Solutions LLC, a family enterprise consulting firm that works with multigenerational families who share assets. Weingarten also maintains a private counseling practice in Santa Monica, specializing in the particular concerns of affluent families.