We all want our kids to remain friends after we die, unfortunately it’s easier than you think to create a situation putting your beneficiaries in conflict. Take the case of the Stiffles (not their real name). Nice family. Six kids. The Stiffles completed basic estate planning, created a living trust that took care of splitting their real estate and financial assets equally among their children. There was a General Asset Assignment that made sure that the remaining “stuff” would not have to go through probate. Dad appointed his oldest son, Jim, as successor trustee because he was “good with money”.
Mom died and Dad was soon to follow, as often happens with couples that have been married for many years. Following a beautiful funeral service for Dad, Jim came in for his postmortem consultation and brought the family so that everyone knew what was to happen. It was clear to all that Mom & Dad wanted the real estate split equally – no problem. It was clear to all that Mom & Dad also wanted the financial assets split equally – no problem. But, what about their “stuff” – who was intended to get what? This is where the problems began. Mom had a small diamond ring that she promised to … all three girls and one of the granddaughters, at one time or another. Mom was getting a little forgetful near the end, but each of the girls was looking forward to having that memento. And Dad had told Jim and Jeff that they could have his tools – how would they split them so that it was even? Jeff really wanted the antique chisel and Jim did as well. So it went with other possessions that were maybe not high-dollar items, but meant something to one or more of them.
To help sort through the situation, we were able to work with Jim to provide some options: (1) they could have a family auction where each could bid with their share for items most important to them; (2) they could have a silent auction where each got what they requested and if there was a tie, it was settled by picking the longest straw (3) they could have a round robin where each could pick one item per round. If none of these worked, they could have a formal sale with an outside auctioneer valuing the items and allowing all comers to bid. Luckily, the family chose the family auction and all walked away feeling good about the distribution of the stuff.
What about your stuff? What’s the best way to keep your family from facing a bad situation? The best way is to make your wishes clear in your living trust. You can list items and their corresponding beneficiaries in the document so that there is no question about your wishes. If you are unsure who should get what, you can define the process, such as a public sale or a private family auction, that your trustee will use to distribute these items. Remember, the clearer you are, the easier it will be for your trustee and your family after you’re gone.
