Avoiding Family Inheritance Battles
The amount of household wealth that may be the result of inheritance can be significant. In Australia, that amount is estimated to rise from nearly $9 billion per year in 2000 to more than $70 billion in 2030. The families able to leave loved ones an inheritance usually have in common that they are able to self-fund their inheritance and own their own home. In the United States, this rich-get-richer phenomenon is also true. Nearly one-fourth of households that received inherited wealth in 2004 had a net worth of nearly $450,000. Also, most of those households' inheritance was more than $100,000.
The impact that inheritance can have on family members as individuals and as a group is often powerful. In older men, as little as a $20,000 inheritance has been found to be associated with a 1% drop in participation in the work force. Disputes, from over billions of dollars to those over who keeps mother's gold earrings, can be sharply contested. Conflicts that can arise while sorting out an inheritance are varied and are often a reflection of the strengths as well as the challenges within family relationships. The grief family members may be dealing with since the passing of their loved one, as well as unresolved feelings about the deceased, can present difficulties in managing the inheritance. While enduring the stages of grief, which can take months to years to resolve, bereaved family members can find managing the challenges of fairly dispersing an inheritance overwhelming.
Fortunately, there are a number of ways family members can navigate their way through the inheritance process. If at all possible, older or ill family members should make their wishes regarding inheritance clear in a legal will. The will should name the person who will ensure that the will is carried out (executor), and that person should have already agreed to fill that role. Although beyond the scope of this article, expressing their wishes regarding end-of-life medical care should be included. While wills do not prevent all family conflicts about inheritance, they certainly present a major starting point for proceeding. In terms of managing family relationships, the following pointers may be useful:
By understanding the unique challenges of family inheritances and approaching those challenges assertively, family relationships can be preserved and even enhanced.
Last Editorial Review: 7/23/2008