Would taking extra steps to establish a more thoughtful estate plan prevent the family battles so common these days? That's the question addressed at a recent continuing education program I moderated. Ruth Dixon-Mueller, a sociologist and author of 2017's fascinating Passing On: What's Fair in Family Inheritance?, and Frederick Hertz, a Bay Area attorney and mediator, weighed in on the strategies they've seen work for everyone at the table, whether it's a happy family-or one with Tolstoy-level dysfunction.
"Everyone assumes their idea of fairness is shared by everyone," Dixon-Mueller said. She believes parents must initiate the discussion with their children, because it makes their heirs more likely to be satisfied with the distribution of assets if they're part of the process.
Hertz encourages all sides to have deeper discussions about what's fair. He's observed how inheritance disagreements among siblings emerge from tensions that have existed for years. His strategy: Gather as much information as possible and start mediating early. Hertz tries to speak with each heir privately, making clear that while they're not the decision-maker, their needs are being heard-and those of others are being recognized, too.
That can be extremely challenging, Dixon-Mueller said. "Treating people equally is different from treating people equitably," she said. "There can be very good, justifiable defenses for treating people differently," including giving more to a person who will be taking on more responsibility or has greater needs.
The real opportunity, Hertz said, comes during the sometimes-difficult confidential talk with the client: In their view, what is each heir's family, financial, and psychological situation? Who might need more help? Does it matter who deserves it, or not?
What if a plan seems certain to generate conflict? Hertz said estate planners need to put their own values in check. Instead of saying "You're being unfair," he presents viable hypothetical solutions. But if the client is fixed on "It's my money and I'll do what I want," Hertz suggests finding a way for the client to explain what they've done. "Put together a thoughtful letter or video with the goal that the heirs will eventually accept the plan, even if they're disappointed." However, he acknowledged that such efforts can backfire if attacked for being incomplete or if they highlight cognitive concerns.
We'll be presenting this program for the public at The Commonwealth Club on November 28. Details available at a later date: www.commonwealthclub.org
The Kirk Kerkorian Estate Drama He 'Tried' to Prevent
Kirk Kerkorian, eighth-grade dropout, billionaire, casino and film dealmaker, died at age 98 in June 2015 with an estate plan that's playing out like a movie script. He married the young Una Davis a year before he died and, the day before their wedding, cut a deal to give her $10 million outside of his estate in exchange for the written waiver of her spousal right to claim one-third of his estate.
According to one witness, Davis lasted just 57 days in Kerkorian's home before she was kicked out. Kerkorian did not mention Davis in his will and left the bulk of his multi-billion-dollar estate to charities to be selected after his death. As you might have expected, Davis sued the Estate claiming her waiver is deficient, and that Kerkorian was subjected to the undue influence of those around him and lacked the required mental capacity because of his advanced age.
The Court of Appeal recently ruled that the estate's executor was within his rights to challenge Davis' demand, but the validity of the waiver remains unresolved. A well-thought-out estate plan leaves your loved ones with no unanswered questions and is well documented to prevent drama. Make an appointment now with an experienced estate planning lawyer who can guide you to your personal estate planning goals. Estate of Kirk Kerkorian (2018) 19 Cal. App. 5th709
Estate Planning, Administration & Litigation, End of Life Civil Rights, Collaborative Practice, Mediation, Conflict Coaching, Elder Law, Taxation
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