SmartInvesting.ca

List of Articles

Estate planning advice for those who want to avoid family fights

by Wayne Cheveldayoff, 2003-07-20

Family fights don’t always occur when a loved one passes away. But estate lawyers see a lot of conflict and bitterness, even in cases where there is a will. It is not enough, as many financial planners recommend, to have an updated will. Rather, to avoid family fighting, it is crucial to have appropriate powers of attorney in place for while you are still alive and to ensure that the will’s contents are seen as fair by the family when you die.

Anyone with doubts about the family fighting that occurs need only view the many sad stories posted on a special website (www.familyfight.com) created by two wills and estates lawyers, Barry Fish and Less Kotzer, of Fish and Associates in Thornhill, Ontario, just North of Toronto.

In one case entitled Children rebel against mother after father’s death, one of the children writes, “It is one sad tale when money overrides decency and respect for your own mother.”

Another case relates the bitter experience of a daughter who is angry over a parent’s will: “Do not depend on the affection and love of your family members. No matter how much love has been shown all throughout the years in all branches of the family…money changes people. Unfortunately, usually for the worst.”

You may also want to consult the book by the two lawyers on the subject entitled, The Family Fight, Planning to Avoid It, A No-Nonsense Guide to Wills and Estates, which is available through the website.

The website and the book leave no doubt that the whole area of wills and estates is very complicated and full of minefields.

It is clear that you should consult a lawyer in making out your will. The will kits sold in stores or over the Internet are just not comprehensive enough to be adequate for most people’s circumstances.

Also, a lot of thought has to go into the provisions of a will, and this may involve extensive communication with the people who will inherit.

In a recent television interview, Mr. Kotzer, who says he focuses his practice more on helping people save families than on saving taxes, listed three important tips for thinking about what should be in a will:

· Children don’t just fight about money. Sometimes, for example, it is a cottage or personal items, such as a piece of china or a gift they have given, that they care most about.
· Do not assume that equality is the same as fairness. One child may have had his or her college education paid for and the others not, and leaving property equally to all three could be a recipe for bitterness.
· Don’t assume good will between your children. You may love them but this does not necessarily mean they will protect each other or have good feelings towards each other after you are gone.

Mr. Kotzer maintains that parents have an obligation to communicate with their children about the will. “It shouldn’t be a secret.”

Another point drawn from the experiences of Mr. Kotzer and his associates is that it is not just death that creates fighting. “I have seen fighting where a parent is incapacitated and didn’t set up powers of attorney in advance and two children are fighting over who is going to be taking care of the parent’s financial health and medical health.”

It is therefore important, he says, in case you become incapacitated through accident or mental difficulties due to old age, to have in place two powers of attorney, one for property and another for personal care. Without these, it is the provincial authorities who will make the decisions (if a doctor declares a patient to be incapacitated) and trying to take over the responsibilities from provincial authorities is difficult and costly.

His other tips include:

· Since laws governing wills and estates are different in each province, if you move from one province to another, be sure to check with a lawyer in the province you have moved to and make the necessary revisions.
· Update the will regularly. Provincial laws can change. Also, be sure the named executor is still able and willing to carry out the burden of discharging a will.
· Cases where a parent remarries require special attention to absolutely ensure that the parent’s children from the first marriage, not just the new spouse and children from the second marriage, inherit property.
· Focus the will on allotting shares of the estate, rather than being too specific about leaving each piece of property or each investment, as these can change over time.

Wayne Cheveldayoff is a former investment advisor and professional financial planner. He is currently specializing in financial communications and investor relations at Wertheim + Co. in Toronto. He can be contacted at wcheveldayoff@yahoo.ca.

The URL for this page is http://www.smartinvesting.ca/articles/20030720000100.html .


©2003 Wayne Cheveldayoff