Will You Inherit Money?
The parents of baby boomers are passing on some $25 trillion, in what may be the largest wealth transfer in history. They’re probably owed one hell of a thank-you note — but there’s a catch. The eventually-to-be-departed are notoriously private about their money, with the result that their adult children often don’t know until the will is read exactly where they stand. "And the sons and daughters hesitate to raise the subject, for fear that they’ll appear greedy," says Jim Grubman, PhD, a wealth psychologist in Turners Falls, Massachusetts, who specializes in the money-related problems of the well-heeled. The result: Once the funeral is over, the bruising battles begin. To shed some light — and possibly help make peace — MORE talked to five women who were caught in the cross fire, and asked several experts for advice.
"My mother didn’t leave me anything."
After her mother died, Janice, 54, and her younger sister went to the attorney’s office for the reading of the will. Only then did Janice learn that their mother had bequeathed everything, about $500,000, to Janice’s sister. That came as a massive shock, since several years earlier, the mom had told her two daughters that the estate would be divided equally between them. "I was devastated," Janice says. "This was the last message on earth that I received from my mother."
Although Janice’s sister claimed she’d known nothing of their mother’s decision, once Janice decided to challenge the will, she learned through litigation that her sister had been the one to write the check to the attorney who changed the document. The two women settled in mediation, and Janice eventually got a quarter of the estate, about $125,000. The victory cost her about $50,000 in legal fees. "I came away a lot stronger," she says. "But it’s still very emotional for me."
The Experts Weigh In
The most effective way to challenge a will is to show that the parent didn’t know what he or she was doing, as a result of either mental decline or undue influence. In Janice’s case, since her sister paid for the lawyer who changed the will, "that’s probably a pretty good indication that there was undue influence," says Gary Altman, an estate attorney in Rockville, Maryland. "But suing is not a cheap process, or a short one, and it can absolutely tear people apart." So before you decide to act, it’s worth calculating the amount you stand to gain and how much that money will change your life.
"We’re fighting over the wedding china."
When their mother and father died a few months apart, Ellen, 42, and her three siblings inherited a house. The others, who live nearby, wanted to lease it or turn it into a bed-and-breakfast. Ellen, who lives several states away, wanted to sell it and split the money. In settling the estate, the siblings also had to divvy up their parents’ personal property — a process that got unpleasant. "There wasn’t a moment where I was like, ‘I hate these people and I never want to see them again,’ " Ellen says. "But there were some tense decisions."
The Experts Weigh In
In terms of the house, if one person is in a cash crunch, or, like Ellen, is disinclined to become a landlord, "the best solution is to have the home valued and let someone else buy out the dissenter’s portion," says Diane Park, a planner with Wade Financial Group, in Minneapolis. As for splitting up personal property, battles can be avoided if the siblings agree on a strategy. In a seniority system, the adult children, starting with the eldest, take turns picking an item from the list of possessions. In a random order process, they draw lots to see who goes first, second, and so on. In a silent auction, each one is given the same hypothetical amount of money; he or she then places silent bids, with the highest winning. That way, a sibling can "pay" a lot for an item she wants and let others go.