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Is Your Sister Or Brother Laughing All The Way To The Bank?

They say that absence makes the heart grow fonder.  I say it makes it grow absent.  One of the most challenge items facing families today is the fragmentation of brothers and sisters spread out across the country and the challenge of who will ultimately become Mom or Dad’s caregiver.  What does this mean to the family inheritance?  Should your brother or sister get paid?  Is the total decisions a proxy by proximity or something that should be more fully discussed? 

It’s challenging to get siblings on the same page when it comes to money and it’s why so many squabble about the family inheritances even before Mom and Dad pass away.  Here are some tips to make sure your brother or sister aren’t laughing all the way to the bank as you discuss this delicate situation with your parents.

Have An Estate Plan

This means that your parents should have something more in many cases than just a will.  It means having a well thought out plan about what is going to happen before they die and what is going to happen after they die.  This may even be spelling out the wishes if you want to get cremated or buried with a tombstone.

A few weeks ago, I was visiting a client who actually took me into his safety deposit box where Dad had been buying precious gems, gold, silver, and other items for years.  The parents (when they passed away) never left any specific instructions as to who was the inheritor of those assets and now the family members don’t necessarily agree on whether they should be sold for cash or kept and passed on to future family members.   Who is going to get Dad’s Rolex?  Who inherits the diamond wedding ring?  What about the wine collection?  These are all important facets of an estate plan.

Who Is The Executor and Who Is The Caregiver?

As you look at your parents and they look their kids, it’s likely they will choose one executor.  A co-executor situation can be a lot more challenging because it isn’t decision by committee.  That executor is someone that has to be trusted and if possible either has great financial, legal, or other skills that can the fair and orderly administration of the estate.  Have you ever heard the saying, “Where this is a will, you’ll see a family fighting over it!”  

The caregiving situation is a lot touchier and where red flags can go up about one sibling getting into Mom or Dad’s back pocket.  What if Mom or Dad have to move in with your brother or sister and they keep count of how much more money they should be owed when they pass away?  Or, what if one brother of sister has done better and they are paying thousands of dollars of bills for Mom and Dad?   If your parents start to have some debilitating medical situation such dementia or Alzheimer’s, who will protect them if your brother or sister become power of attorney and can essentially make medical or financial decisions for your parents?

ALL KIDS KEEP SCORE

The reason that this can become so contentious is that kids start keeping score from their early days on what you do for them financially and they store that in a special place for family fights.  This starts from who had a better birthday party to the sweet sixteen to who got more money for going to college.  When the kids keep score, they anticipate that everything will be split even-steven between all of the kids, but we know that is hardly ever true.  Parents play favorites or they make up their own ‘equality’ scale when they build out estate plans. 

If possible, it’s best to have an open and honest family discussion on who the executor will be, who caregivers will be, who is a beneficiary of what, and how you plan to split up the special family artifacts.  You can either start World War III now or it will happen when you pass away. But, it’s best to get it out in the open so there aren’t secrets without divulging or disclosing what you are worth financially.

Trusts Are Possible

If you don’t want this to become a matter of public opinion, you could consider setting up a trust for the family while you are living or set up trusts when you pass away.  This will keep all of your matters out of court if you set the trust up when you are living, or the testamentary trusts can help so your own kids don’t stub their toes financially when they inherit the money.

I’m not sure you’ll ever convince the kids things are done equally, even if you split up everything equally, because someone will always feel they are more deserving than the other(s).  That’s just human nature.  But, by being proactive about these matters, you can do a better job of reducing the family squabbling and make sure one child doesn’t take advantage of you, so they are laughing their way to the bank.

About the author  ⁄ Ted Jenkin @ Your Smart Money Moves

Ted Jenkin @ Your Smart Money Moves

Hey!

My friends and family all think I’m a workaholic, but I say I’m just a guy that loves to help people do better in life.

My mother is still the only one that calls me by my real name Theodore Michael, my wife calls me Teddy, but for the rest of you it is just plain old Ted.

Ever since I was a little kid, I always loved money and being an entrepreneur. In fact, I still have cassette tapes of me talking to my grandmother at the age of five and my mother tells me all the time how much I played with money as a kid...

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Ted Jenkin is a frequent guest columnist for the Wall Street Journal and Headline News Weekend Express. He is the co-CEO of oXYGen Financial. You can follow him on LinkedIn @ www.linkedin.com/in/theceoadvisor or on Twitter @tedjenkin.

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. oXYGen Financial is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS do not provide tax or legal advice.

The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor regarding your individual situation. 

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