Avoiding Family Feuds

A study by U.S. Trust revealed that 70 percent of families fail to successfully transfer their family’s assets to the successive generation.  The three main reasons for this failure are: (1) lack of communication among family members; (2) absence of a generally acknowledged purpose for family possessions; and (3) lack of preparation on the part of heirs.  Families who stumble through the estate planning process can undergo negative impacts on their even diminutive estates. 

Communication is a key element in transferring assets successfully.  Family meetings can provide a setting to help heirs address their own money issues as well as engender an appreciation of the value and virtues of the older generation.  If anything, the parties can come to an understanding of what will be expected and heirs can begin to recognize the importance of planning. 

Furthermore, heirs should take time to understand the importance of good tax decisions. Heirs will have to deal with the form in which their interest is distributed to them and the decisions they make can have a major impact on the income taxes they ultimately face. 

See Ray Benton, About to Inherit? Tips for Avoiding Family Fights and Tax Trouble, The Denver Post, Oct. 26, 2014.