Estate inheritance causes family issues and how to manage

Estate inheritance causes family issues and how to manage

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"Sibling co-ownership can work," adds Arlington, Va., estate attorney Donald Manning. "But it's the exception, not the rule, because it involves money issues—and money


usually brings out the worst in people." Add the emotional stress of a parent's death and conflict is almost inevitable, estate attorneys say. "When Mom and Dad are still


alive, the family tends to get along, but once they are gone, it is not unusual for the family dynamic to change," says David Fry, coauthor of _Saving the Family Cottage._ "Old


grudges and jealousies reemerge—'He stole my bike when I was 12'—and retribution comes to the surface." Spouses may aggravate those feelings, Fry adds. "Siblings tend to


be more forgiving of other siblings, but spouses don't have the same motivation to compromise. So the [married] sibling can be caught between his or her spouse and sibling, and that can


cause real problems." Unfortunately, "we're seeing disputes a lot more often," notes New York elder-law attorney Bernard Krooks. "It's just awful." The


sluggish economy also plays a role, as some financially strapped siblings seek to cash out of a longtime investment. Inevitably, there are arguments over the value of the house and payout


terms. Such disputes were certainly the case in 2008, at the height of the recession, says Seattle attorney Wendy Goffe. But disputes, she says, can also be more personal in nature.


"One owner objects to something the other owner is doing and wants to get out. One may be smoking or bringing dogs, or even peanut butter, into the house when the other is allergic to


smoke, dogs or peanut butter," Goffe says. "If they can't agree on minor things, it's very hard to work out big issues, like replacing the roof." Upstate New York


real-estate agent Mike Smith (no relation to Robert Smith) has frequently encountered these bitter disputes when he lists inherited houses for sale. One stands out: Four siblings fought for


more than a decade over their mother's home, an apartment in a four-unit building that she owned. After a judge ordered them to sell the building, the two coexecutors went to


Smith's office to sign the listing agreement. "Here they were, each one in their late 70s, calling the other a liar. One side argued that one of the other siblings was responsible


for caring for their ailing mother; the other accused that sibling of taking advantage of the situation by living there rent-free. They were like 8-year-olds." Fortunately, Smith said,


he and his four sisters avoided such acrimony when they had to sell his parents' Dalton, N.Y., house. Still, it wasn't easy. "Everyone wanted to sell the house, but one sister


had a friend who was interested in buying, so she wanted to weigh in on approving any buyer. I said no, it was strictly a business decision." Dealing with a parent's primary


residence can be thorny, says Wilmington, Del., CPA Jordon Rosen, former president of the National Association of Estate Planners and Councils. Frequently, he says, an adult child may be


living at home, taking care of the aging parent or having nowhere else to go. "The parent wants to leave the home to that one child — even if the child doesn't have the resources


to maintain it. That causes a rift with other siblings who don't want to kick their brother or sister out, but also don't want to kick in money to maintain the home."