In our last column about Lynne and Greg’s blended family challenges, we made a passing reference to their decision to use a small gifting strategy to pacify some of the children who felt their siblings were getting too much of their stepparents’ financial attention.
In describing that situation, we were quick to point out that parents must never be in the position of having to use their estate to meet their children’s expectations.
We regularly tell our clients that their estate is theirs, and theirs alone. They can manage their resources however they want, and they should never build any expectation that the children’s wishes somehow control.
In fact, all too often, we spend time working with clients to get out of that expectation that was somehow built over time, most often unintentionally.
We’ve written previously about this pervasive and, often, unspoken problem that all parents can face; in our experience, the problem is not unique to families with significant family wealth.
Financial jealousy can be found in many ordinary, middle-class families because money is not always the issue that motivates children.
Instead, the motive can be rooted in unhealthy emotional needs of all kinds.
We are perhaps the least qualified to help parents address such emotional needs, but we see the effects often enough to know that their estate plans can be impacted substantially. So, we spend whatever time is necessary helping parents overcome the expectation of their adult children that they are somehow entitled to their parents’ wealth. Many times, that is a difficult message for parents to convey. We hope this column will help.
There has always been a lot of discussion in political circles about entitlement; and, unfortunately, that word has now begun to take on a similar feel in the estate planning area, albeit for entirely different reasons.
At the risk of creating tension where it should not exist, we often have to deliver startling news to the adult children of middle-aged, or aging, parents: You are not entitled to anything your parents have earned or even inherited from their parents. It is theirs until they say it is not theirs.
One of the most surprising discoveries is how often that news is not well-received by the adult children of our clients.
Instead, we often see adult children act entitled to the money and property their parents have accumulated. Perhaps the saddest example we’ve encountered is the daughter who acted as the guardian of her disabled and nearly dysfunctional aging father; she refused to give him the medication he needed because she felt the cost cut too deeply into her inheritance.
Clearly, that is an extreme example and, gratefully, an exception. However, the entitlement attitude seems to be increasing. From an estate planning perspective, that attitude presents a dilemma because too many parents feel pressured to make their estate plan meet the expectations of their children and, often, it is hard for us to convince the parents to ignore that pressure.
Of course, we are not saying children should not be involved in their parents’ estate plan; often the involvement of adult children of aging parents is a vital part of the process. But there is a significant difference between involvement in the plan and taking it over.
So where should parents start if they are concerned about the pressure their adult children might apply?
Every estate planning attorney is prepared to help with that problem; and often, that concern is one of the initial subjects addressed.
One of the most common places where that tension can be exposed is the parents’ consideration of a trust (which extends their control over their money and property after their passing) instead of only a will (which gives immediate control to the beneficiaries after their death). A family conversation about a will instead of a will and a trust can raise difficult issues, so it is understandable why some parents delay addressing these concerns and even avoid making these decisions. Such delays can often make the problems much worse.
Next column, we’ll talk about what happens when those concerns, or others, prevent parents from creating an estate plan of any kind and die without any type of a trust or a will. The state of Colorado has a ready-made plan for those people, and we’ll discuss the details of that plan.
We discuss these, and other estate planning matters in our no-cost seminars. In light of COVID-19, we are changing the format of these to telephonic participation so that we can be careful, but still share relevant information.
If you are interested in participating, or if you have any questions about this article or topics you would like us to address in future columns, send an e-mail to Admin@GJlawyer.com or call 970-270-1213, ext. 4.
Brad Wright’s business and estate planning practice includes transactional matters with a special focus on business succession. His brother, Steve Wright, has a similar law practice in Idaho Falls, Idaho and, together, they assist businesses of all sizes and types with a wide variety of legal issues.
© 2020 Brad R Wright, Steven J Wright