Non-Tax Aspects of Estate Planning - Part III
As we continue to look at the non-tax issues in estate planning, we are struck by the fact that many families do not see, or possibly are not prepared to face, difficult emotional issues which are easily identified and almost certain to bring about considerable family tension.
For example, we recently worked with a family who a substantial family business and, in many respects, the birth order of their children was the reason for the resulting family tension. The couple had two children and then fifteen years later had twins. Within the family unit itself there was such diversity of interests between the two generations of children that tensions ensued. The chief emotional officer, the father in this case, died at a reasonably young age and therefore the family was left with a wide variety of ages of children (plus a surviving widow) and their different financial interests were similar to an almost three generation (i.e. parent, child, grandchild) scenario. The financial interests of the younger children versus the older children were so different, tension within the family was created upon the death of the father, the chief emotional officer.
In this case, simply the issue of birth date order alone, combined with the desire to pass on a family business, is enough to alert someone to carefully work through their estate plan.
If something as simple as birth date order can cause tension, possibly litigation, and emotional chaos within a family, one can easily see the need to carefully consider the non-tax issues in almost any estate plan.
An important and helpful "first step" in the process of trying to avoid the "train wreck" is to begin the process of holding regular and productive family meetings.
In future blogs, we will look at further non-tax transition issues.
All the best,
Ian & Suzana.
