by admin on October 31, 2009
Many, perhaps most, families find it difficult to talk about estate planning. Parents may be uncomfortable with the idea that their adult children would have any input in the planning process. Without that input, parents may make decisions that seem wise, but are based on mistaken beliefs and impressions. Some may be uncomfortable informing their heirs why they have made the plans that they have made — or even the broad outlines of what those plans are.
The October 29, 2009 New York Times special section on Wealth & Personal Finance included an article by Deborah L. Jacobs, “Clauses Aimed at Keeping the Heirs Quiet.” After reviewing recommended steps to deter will contests, it cautioned that estate planners say the best way to avoid an estate settlement conflict is to do some smart estate planning conflict prevention, “taking steps during life to preserve the peace.”
“For example, rather than leaving relatives guessing about the motives behind your decisions regarding who gets what, you may want to spell out your reasoning in your estate-planning documents — or have a frank discussion beforehand.”
The candid discussion has the advantage of not taking the heirs by surprise when the contents of the will and related documents becomes known. But the very idea of the discussion is a daunting prospect to many. A mediator can help by facilitating conversations about family wealth and, in that way, preventing family wealth conflicts.
by admin on June 23, 2009
On June 1,2009, Annie’s Mailbox, a nationally-syndicated advice column, published my letter about using a mediator to help with a family fight brewing over heirlooms. These kinds of conflicts are common, whether the heirlooms have great monetary value or only sentimental value. Read the original letter and response, describing the estate settlement conflict. Then read my letter, explaining how estate mediation can help.
Sometimes people wonder just when they should consider estate mediation. The time is right whenever the parties (and, where it applies, their advisors, including attorneys) feel the time is right. Mediation can be helpful in the estate planning process, when difficult issues can be better addressed with the help of a neutral third party. Addressing these issues at the estate planning stage, though challenging, can prevent possible damage to a family when the issues are left until the estate settlement stage.
Issues can arise in estate settlement as soon a death occurs, when emotions are especially raw. Or they can simmer, and then erupt, as family members learn about the impact of the settlement of an estate.
In either case, mediation can be beneficial whenever it is apparent family conflict is in danger of harming the family.
by admin on March 31, 2009
The protracted criminal case involving the estate of socialite and philanthropist is nearing trial in New York City. Prosecuters say that her son and his lawyer conspired to defraud her by having her change her will when she was mentally incompetent to do so.
Of course it seems that the ultrarich lead different lives than everyone else. But much of the difference in this case is only in terms of scale. Her life had been grand and her son had plenty of money even before her decline and the changes to her will, whether or not they were executed properly.
This type of estate planning and settlement conflict, though, can happen in any family. An elderly person is in some manner of mental and physical decline. Certain trusted people are expected to perform certain functions. Change occurs. Someone in the family smells a rat and then sounds the alarm. Battle lines are drawn and sides chosen by the interested parties, both in and out of the family.
For this family, the conflict also involves criminal allegations, fortunately a rare occurrence in estate planning and settlement conflicts. The dispute also involves millions of dollars, famous names, and lots of publicity. But the sources of conflict are the same here as in most families in this painful situation.
by admin on March 30, 2009
Today’s New York Times includes a story by Charles V. Bagli titled “Family Feud Over a Will Nears an End After 25 Years.” Yes, 25 years in the New York court system. Two sisters, Evelyn and Diana, say that they had believed that their father had died broke and without a will in 1956. They say that they first learned, by happenstance, in 1983 that their father had owned as many as 100 properties in New York City and had left a handwritten will leaving them a portion of his estate. Worse still, the sisters say that they own mother and brother conspired to keep the will and the property a secret from them.
Their mother died in 1993, but the brother, Walter Sakow, claims that his sisters knew about the will, that the properties were far fewer in number, and that the proceeds from the properties were used to his sisters’ benefit.
The dispute has wound through the Bronx Surrogate Court, the Appellate Division, and back. The case is finally drawing to a close as a determination is made about what to do with the remaining seven properties, valued at $11.3 million in 2007.
What could drive a dispute to last so long? In large part because the judicial process has been unusually slow. But, I often say that the combination of money and emotion is fertile ground for conflict. This conflict has both in spades: millions of dollars and the sisters’ profound sense of betrayal by their own mother and brother.
Mediation is a voluntary process that families and others can use to prevent, reduce or resolve conflicts. Mediation sessions are confidential, and a professional mediator is a trained neutral who has no stake in the outcome and who works with parties to create resolutions tailored to their needs and priorities.
Mediation or consulting assistance for effective communications can be helpful both in the estate planning process and at the time of estate settlement and administration.
At the planning stage, mediation focuses on preventing future problems. Decisions involving assets and family dynamics can be challenging. It is not unusual for people to try to avoid the discomfort of grappling with complex issues. Yet, when important concerns are left unspoken, the estate plan itself may deficient because those who created the plan were not adequately informed. As the plan is eventually executed, unforeseen problems may arise. Family relationships and family wealth may suffer.
Some couples or individuals become paralyzed by the difficulty of sorting out conflicting perspectives and priorities without help, and their estate plan is never completed or is not updated as necessary.
At times, the effort to communicate the motivations behind planning choices is essential to prevent misunderstandings that can lead to bruised feelings or worse.
Families who run a family business, blended families, families who must plan for children with special needs, nontraditional families, and families who will leave significant assets to family foundations or donor-directed funds may face additional financial and emotional hurdles.
Estates of significant size can create conflicts over distribution of both significant assets and cherished household items. Families of more modest means can face difficult decisions over the disposition of the family home. Adult children may be confused and angry about the estate settlement process.
Mediation provides an alternative to avoiding difficult but essential issues, enduring ongoing family discord, or initiating litigation. If litigation has begun, mediation can help parties reach a faster, less expensive resolution of their own creation.
Mediation does not take the place of the working relationships that attorneys, financial advisors, accountants, and other professionals have with their clients, but can often help them to both avoid conflicts of interest and to achieve their clients’ goals.
by admin on January 22, 2008
A recent report by the AARP’s Public Policy Institute, conducted with the American Bar Association Commission on Law and Aging, took a look at the guardianship process for incapacitated adults. The report highlighted innovative practices around the country, including the model guardianship court in Suffolk County, New York.
That program was also featured in a January 3 article by Laura Lane in the Herald Community Newspapers, “The second half: Growing older in Nassau County.” The article explores some of the challenges of the guardianship process and how some counties have grappled with them. As Ms. Lane points out: “Guardianship court often involves family dynamics and interactions that, at times, can turn ugly.” The Suffolk County program includes a mediator available in court.
One family described in the article used the mediator suggested by the administrative judge to help siblings agree on a guardian for their mother after one sibling had alleged that another had exercised undue influence in persuading the mother to change her power of attorney from one sibling to the other. “Mom felt nervous in the courtroom, but once we went into mediation, she was very open, and it was very evident to us how she felt. None of us would have sat in the same room and discussed this without mediation. It would have broken my mother’s heart being in court, hearing her children testify against each other.”
Mediation can help families resolve these sorts of conflicts, before or after court proceedings are begun, helping to prevent or minimize the emotional and financial damage to individuals and to families.
by admin on January 9, 2008
… but not enough to do nothing.” That’s the concept expressed by Richard A. Lehrman, a Miami Beach attorney, in a Saturday New York Times article, “Bequeathing, With Strings Attached” by Hillary Chura. Mr. Lehrman is describing the idea that inherited wealth be used to allow the recipient to enhance his or her life but not to lapse into unhealthy sloth. The article cites a statistic provided by the Spectrem Group, a consulting firm specializing in the affluent and retirement markets, that nine million U.S. households are worth $1 million or more, excluding their primary residences.
As the title of the article suggests, many of these families are leaving significant wealth to their heirs, with an eye to influencing how an inheritance is used (or not used.) Family decisions about wealth are a prime area for conflict, stirring up all sorts of issues involving family relationships.
If only a small percentage of those nine million families anticipate or experience some conflict in the planning, announcing, and understanding phases of inheritance decisions, that’s a lot of disputes. Some will be hidden and consciously ignored, some will explode after a loved one’s death, and some will result in a slow, seething burn.
The negative impact of many of these disputes can be minimized with the help of a mediator: someone with no dog in the fight, no ax to grind — pick your favorite metaphor. The point is that taking a proactive approach to resolving the conflict with the help of a trained, neutral mediator can preserve both family relationships and family wealth.
by admin on December 30, 2007
Last time I talked about the great benefit to a family that comes from creating a communications plan before one is needed and how having family together over the holidays can provide an opportunity to create that plan.
Sometimes being together over the holidays and seeing everyone face to face provides unmistakable proof that some difficult decisions need to be made, involving a family business or family member — or both. An important first step is to acknowledge explicitly that those decisions need to be made, whatever they may be. If those involved can agree to start a decision-making process (instead of engaging in denial or delay), they may keep open options that will be unavailable if they fail to take action.
by admin on December 26, 2007
“…’Tis the season to be jolly….” It’s no secret that the holidays can be a stressful time for families. Old wounds can be reopened, old grudges renewed, buried emotions reignited. People who are rarely see each other may be together for days on end.
But the holidays also present an opportunity for families.
Sometimes a family should focus simply on setting up some kind of communications plan for the future. Just having some agreed upon method for communicating can be a great benefit if communications need to be made in a crisis. Whether in a family business or in an extended family with an aging parent — or a combination of the two — thoughtful planning can avoid missteps or bruised feelings when time is critical and emotions are running high.