I often joke that my grandparents were the original “millionaires next door.” Neither of them ever made over $40k in a single year – my grandfather was a meter reader for the DWP in Los Angeles and my grandmother was a teacher. They had a number of attributes that led to building wealth in their later years. They did a remarkable job of balancing living for today with saving for tomorrow and they always invested in good financial and legal advice.
My grandparents invested in an estate plan created by a reputable estate planning firm (this was in the 1990’s – so before I was an attorney!). They thought of their son (my father), as trustworthy and very financially astute and responsible, so they naturally named him the successor trustee of my grandparents’ trust. Their daughter (my aunt, who passed away a decade ago) unfortunately had issues with substance abuse and financial management, so my grandparents thought it was best to protect her from herself and others through the trust. My father was selected as trustee to manage the share set aside for his sister. As a final measure of protection, my grandparents agreed that because of my aunt’s situation, and not wanting to rock the boat and risk a negative reaction from her, they would not communicate with my aunt about their estate plan.
One of the main reasons I became an estate planning attorney was because of what happened next. You can imagine that after my grandparents’ deaths, my aunt felt slighted by her parents. Along with her profound grief, she was also disappointed that she could not discuss her feelings with her parents now that they were gone. To worsen the situation, my father was put in the very difficult position of explaining to his sister that, in fact, he would be controlling her inheritance for her lifetime.
We’ve found that conflict after the passing of a loved one tends to be routine. For example, beneficiaries not named as trustee often take that choice as an insult and as a result, it often dredges up ancient grievances. Children of a deceased parent from blended families often are hurt that they are not receiving their inheritance from their deceased parent now, rather than only someday after the passing of the surviving spouse.
The best way to avoid these misunderstandings is to hold a family meeting to review your estate planning and intentions for your loved ones while everyone is safe and healthy. The family/team meeting usually consists of you, your children or other loved ones, your successor trustee, and your other trusted advisor(s). The purpose of the family meeting is to increase family communication and harmony surrounding the estate plan and head off misunderstandings to reduce potential conflict after your death. I’m not saying that it’s an easy meeting to consider having – especially when you are not in a position to treat your loved ones “equally,” but this direct and honest approach absolutely pays tremendous dividends for family understanding and unity in times of crisis. Note – most of our clients are not sharing financial details with our clients at these meetings.
Through my personal and professional experience, I have found that conflict, due to the lack of communication, occurs most of the time in the estate planning process. Engaging in conversations with a team of your trusted advisors and adult beneficiaries to facilitate more understanding about the plan and open communication about concerns and frustrations is an important foundation of what you are trying to achieve in the first place: taking care of your loved ones in a way that helps care for them financially and preserves and strengthens their relationships with each other.