I received a very sad story from a friend of mine, who I’ll call Roger, that I felt was worth sharing as a cautionary tale:
About three months ago, my paternal grandfather was diagnosed with lung and intestinal cancer. He had worked for forty years at a factory that, for most of the time he worked there, used large amounts of asbestos in their processes. His lawyer contacted the company and they immediately reached a very nice settlement that would pay for all of his medical needs plus provide him with a large sum of money ($300,000 after taxes and fees, apparently).
Grandpa was what you might call land rich and money poor. He never had much money at all, but he lived on about two hundred acres of land in an undeveloped area. He had five children and wanted to split his entire estate equally among all of them when he passed away, an arrangement that had been informally worked out a long time ago because two of his children wanted their forty acres to build a house on (note: Roger’s mother was one of these two). Two more of the children did not want their forty acres of land, so they agreed to give their land shares to the fifth child, the one that had been most vigilant in taking care of the old man in his dotage while they lived far away and had no interest in the land and didn’t really have time to help Grandpa.
During the intervening years between this informal agreement and now, that fifth child (my uncle Rick) has spent countless hours working and landscaping all of that land, clearing out brush, keeping it mowed, landscaping pieces of it, and so on. The 120 acres looks incredible now; his work really has increased the value of that land and it has also given Grandpa a really beautiful natural place to live on at the end of his life. He goes on walks all over the land and fishes in the clear streams and such.
Now that Grandpa is dying and this money has arrived, he called his children together to make clear what was to be done with the money. He intended to split the money into five equal pieces for each of them, which seems fair to me. Well, the two children who were not getting land said that they should each get a piece and a half and the child getting the 120 acres should get nothing at all.
Since the original land agreement was never set in stone, the whole situation blew up into an argument. Grandpa went ahead and signed everything (his land and the money) over to a living trust with Rick running the trust. The trust basically says that the land is split 120/40/40/0/0 and the money will be split into five equal parts. But those five parts won’t be going to each of his children. The three children getting land each get a share, but the other two shares are going to be divided equally among all of his grandchildren, meaning I will be getting about $15,000 when he passes away.
Right now, most of my aunts and uncles are not speaking to each other and it looks like the fun we used to have at family reunions and Fourth of July parties and things like that are over. There’s also some talk about legal action but I don’t think that will happen because there’s no point. I think that it’s pretty sad that such things are being thrown away out of pure greed.
Obviously, there are a lot of things to criticize here, particularly the greed of two of Roger’s aunts and uncles. On the other hand, those two are already getting their just desserts: nothing at all from the estate, while Rick gets 120 acres of land and $60,000.
Lessons on Inheritance and Will Preparation
1. If you have dependents, think carefully about what would happen if you passed away
This is something that a lot of people in their twenties and thirties overlook. What happens to that family heirloom? Who will be responsible for your children? These are tough questions that are important to think about.
2. When you set forth plans to divide your estate, make these plans legally binding
One big mistake here was that they never made the land division legally binding until just now. Had they done that, it would have been more acceptable to everyone and there would have been no argument about splitting things differently, because the land split would have been out of the question.
3. Unequal splitting of property has a great potential to cause heartache
In some situations, this won’t matter, but it clearly does in the situation above. If you’re thinking about leaving more to one descendant than another, be sure everyone knows the reason and that everyone is fine with it. It is your decision, of course, but it is your children and other relatives that will have to live with that decision when you’re gone and you likely don’t want to leave a legacy of squabbling children.
4. Choose your executor(s) carefully
Part of the anger in this situation seems to be coming from the fact that the executor is getting the largest share of the assets. If this may cause a problem or a potential conflict of interest, you may wish to have an executor who gets little merely in the form of a fee for the service. I am actually doing the latter, as I have a close friend as my executor and I intend to leave him in that place for the foreseeable future.