Legacy Planning – How to Use Your Money and Wealth to Help Bring Your Family Together

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Thomas Bucher died in 2008, at the age of 59 leaving his $1.25 million estate to the Lancaster Public Library instead of his family. The Bucher family said it was unaware Thomas had changed his will. Earlier versions of his will left his estate to his family. The family challenged the will, and the library was forced to defend its claim in court.[1]

Grounds for Testing a Will

A will is a legal document that directs the distribution of a deceased person’s property. The directions of a will can be challenged through a process called a will contest. This is a particular type of lawsuit that seeks to invalidate the deceased’s final instructions. In order to contest a will, a challenger must have[2]:

Legal standing: The party involved in the lawsuit will be personally affected by the outcome of the case. Usually, this is an intestate heir or beneficiary named in an earlier will.

Time is of the essence: The laws of the state where the decedent was a resident dictate the time limit for contesting a will. In most states, the will must be contested within six months to a year of the date of death or the date of probate.

Legal grounds: There are four grounds for contesting a will:

  • The will wasn’t signed correctly (usually two witnesses are required).
  • The deceased lacked the mental capacity (they didn’t understand what they were doing).
  • The decedent was unduly influenced by others.

Whether any of these circumstances applied to Mr. Bucher’s will is up to the courts to decide. Unfortunately, the surviving family must expend legal resources and time to challenge the will. The library, which was presumably the one to benefit from this inheritance, must do the same to protect its interest. All too often, we discover that where there is a will, there is often a war.

Tips to Prevent a Will Contest

How do we avoid challenges to our wills that can put our families at war with each other, or our charitable intentions? If we are concerned about how money and assets will affect our family, we should have discussions with them now. They should understand the thought process behind our will and charitable intents. Having discussions now gives our children the chance to ask questions and understand the reasons behind our estate decisions.

Taxes should not be at the center of estate planning. Some strategies may save taxes but destroy family relationships in the process. Properly drafted estate documents are an essential part of the planning process and should be drafted to minimize taxes. However, family harmony should be the priority. If harmony is preserved and taxes can be saved, we have a win-win situation. It’s the obsession of putting tax issues at the center of estate plans that is ill-advised.

Full Disclosure

Have you shared the contents of your will with your children? Family dynamics improve when transparency, openness and tradition drive giving decisions. Many people will read this and say, “It’s none of their business!” I couldn’t disagree more. Consider how different Mr. Bucher’s situation may have been had he shared his intention to leave his estate to the library with his family before he died. A family should use their money and wealth to bring the family together. Openness and transparency set the stage for sharing and dialog. Money can divide, or money can connect, money can help grow relationships or money can destroy them. Keeping our children in the dark about our intentions until we’re gone has the potential to cause conflict.

The goal should be for our wealth to flow to the next generation, which can release the money to their children (our grandchildren) in time. It should become wealth that has been gracefully and wisely relinquished – a gift that keeps on giving and cements parent-child relationships, not one that undermines and confuses. A family, regardless of its wealth, must develop a culture that imposes discipline on the disposition of its assets. The best way to make this happen is to start while we are still living; when we can share our wisdom and experiences, not just money and assets passing through probate.

Fairness

Finally, a note about fairness. In the context of planning for the division of your assets, does fair mean fair, or does fair mean equal?

When one child receives a gift ahead of a sibling, the inequity may affect the relationship between siblings from that day forward. The real gift is not the cash but the wisdom of the concept of equality when a gift is made to both children. If parents can’t afford to give equally to all their children, it could mean the gift being considered is too generous.

Fairness doesn’t happen by accident. It requires planning. We need to treat gifts made when alive with the same care and attention as inheritances that will be done through the will. Gifts and inheritances can release potential or destroy potential and family harmony. I feel how we give is as important as what we give and when we give it.

The words and deeds that we leave behind will be what guides the lives of those we have touched after we are gone; not our money and assets. Be sure to make the time with family to share your wisdom and model the characteristics you want your children to possess. Teach them the important lessons you learned from your parents and grandparents. We want to pass on a legacy that keeps our family together; not one that drives them apart.

 

Rick’s Tips:

  • The directives of a will can be challenged under specific circumstances.
  • Taxes should not be at the most important issue of an estate plan.
  • A wise family will use their money and wealth to bring the family together.

 

[1] Lancaster Newspapers, “Retired judge loses appeal of son’s $1.25 million bequest to library”, By Gil Smart. June 12, 2011

[2] American Bar Association, Chapter Nine, Contracts & Consumer Law

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