Avoiding the Dreaded ‘Estate War’



Ronald Fatoullah


When their father died Rob was 20, Ed, 23. “Dad didn’t have much of an estate and never wore any jewelry, but he had a favorite watch that he wore every day,” Rob told me. Both brothers wanted the watch because it represented a connection to their father, who died young, in his 50s. “We decided that the fairest solution was to share it,” Rob said. “So we made a verbal agreement to exchange the watch every Father’s Day.” The brothers have continued this tradition over the years. They are now in their 60s.

While Rob and Ed were able to work out their differences creatively, not all siblings are as trusting when it comes to resolving disputes over a family estate. As a young attorney, I initially thought that conflicts were almost always about money or property. Since then, I’ve learned that such conflicts have more to do with what money represents on an emotional level.

One of my colleagues, Robert Karpas, a clinical psychologist in Roslyn, N.Y. points out that people are often reasonable when making difficult decisions—until underlying feelings emerge. These “latent feelings,” he says, are strongly held. “They run silent and they run deep. They can trigger long-standing hurt, anger, guilt and even revenge among family members.”

The surfacing of these deep-rooted latent feelings can begin what we call an “estate war.”

From our observations, the biggest estate conflicts occur from the unequal distribution of the parents’ assets. For instance, a parent may feel compelled to give one child additional compensation for moving back home to take care of the parent, but other siblings may look at that caregiver child like a “freeloader” who is getting free rent and all expenses paid for by living with Mom. Situations where a parent makes larger lifetime gifts to one child who may be needy financially, but not to the other children, often create resentment—even if the other siblings are well-to-do.

When such conflicts arise, we consider different levels of intervention—primarily negotiation and mediation:

Negotiation is an approach used to resolve family differences without an impartial third party. It’s often a good idea to negotiate outstanding issues, if possible, because even if it’s not successful, the effort may enable parties to narrow down the issues and assist in the following mediation process.

Mediation is an informal, confidential process where an impartial third party, the mediator, helps family members resolve issues by facilitating the discussion and encouraging them to settle their disputes amicably, concluding with a written agreement that is acceptable to all. One of my associates, Debby Rosenfeld, notes that “through mediation, the parties are also given the opportunity to vent their feelings, put emotions behind them and focus on their real needs and interests.”

So how does a feuding family begin mediation?

We ask each side to provide in advance a confidential statement of their position, the issues, what they want to accomplish, and why. Then, we ask each side to present a brief verbal overview of the dispute.

Once the issues are resolved verbally, an agreement is drawn up, reviewed by the parties, and then signed. The process usually takes from half a day to several days to complete. The cost: typically from $1,500 to $3,500 per day. Compare that to a lawsuit, which could cost each party tens of thousands of dollars, or more.

Here’s a typical scenario that was resolved through mediation:

We recently worked with an 85-year-old mother who was becoming very fragile, physically and mentally. She had two daughters: Jane, who lived on the West Coast and Emily, who lived within a few miles of her mother in New York. Emily had her own business and visited Mom once a week for an hour. Jane recognized that their mother needed more attention and decided to quit her job and move into Mom’s house, becoming her sole caregiver for the next two years. Her mother recognized that Jane lost income and wanted to pay Jane a “salary,” but Jane refused. Mom then signed a new will, giving her home to Jane exclusively and splitting the rest of her assets between the two daughters.

A year after signing her will, Jane and Emily’s mother died. Not surprisingly, Emily was furious when she found out that Jane was given the home. She contested the will, claiming that Jane unduly influenced their mother and that Mom was not legally competent to sign the will.

We mediated several issues, including the distribution of personal property (such as their mother’s jewelry) and what was to happen with the home. Jane did want the home and didn’t mind paying for half of it, contrary to her mother’s wishes. But she also wanted an apology from Emily. We worked out a framework of a settlement that included an apology from Emily, an extra piece of jewelry for Jane, and an agreement by Jane to pay Emily for half the value of the home within a year of their Mom’s death.

In the end, such mediation helps families avoid the huge cost and emotional anguish of protracted estate litigation—when the only winners are invariably the attorneys. But there’s also a priceless benefit to such agreements: They often help family members save face or regain a sense of fairness, creating a way for siblings to reconcile and reconnect.

Ronald Fatoullah is the founder and principal of Ronald Fatoullah & Associates, a multidisciplinary firm focusing on elder law, estate planning and special needs. For more information, see his website, www.fatoullahlaw.com.

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