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Having an Estate Plan Can Help Split Assets Without Dividing Siblings

Plan now so there are no squabbles after your loved one is gone

CliqueImages/Getty images Linda Rice Thorup and Lisa Rice Hayes grew up on a large rural family plot near Albany, New York. When both parents passed, they had the difficult task of dividing and divesting their lifelong family home. How to sell the land and respect their parents’ desires about conservation and development? ? And what to do about the one grandchild living there who was attached to the place? Their story has a happy ending. Not only were the sisters close, but they had long ago worked out a division of duties and effective communication as their parents required more caregiving. Get instant access to members-only products and hundreds of discounts, a free second membership, and a subscription to AARP the Magazine. "A successful division of assets greatly depends on what happens before parents get sick or in cognitive decline,” says Rice Hayes, a former estate planning and administration attorney in Baltimore. “If siblings got along before, that helps mitigate some of the stress in dividing assets.” Rice Hayes had been , so it was easy to handle that aspect when they passed away. Any estate situation is eased with , ideally involving an outside professional — whether a banker, financial planner or lawyer — to help outline, mediate and document a family's wishes. A third-party expert is that rational person in the room who doesn't have a dog in the fight. After a long stretch of traveling from out of state to shoulder caregiving responsibilities, Lisa and Linda decided to hit the pause button on selling the home. They were in a position to step back, take a break from the hard conversations and figure out how to divide things in a fair and equitable manner.

Get plans in writing

Not every story is so harmonious. When siblings are already counting on an inheritance, or their financial needs are different, it can get more complicated if wishes aren't stipulated in black and white. , Sheryl Richter had siblings and half siblings spanning 22 years, along with a few ex-stepmoms. Her father had done well in life, and his motto was always “One family.” When he fell sick in his 80s, he began to look at his estate from the perspective of considering who could best manage it. He continually shifted the executor role based on that week's sentiments. “It became his last act as a patriarch and a way to exercise control,” says Richter, who ultimately took a leadership role in bringing consensus. "There was a decent amount of money at stake,” she says, “and it would have been easy for each of us to play off one another. Luckily, we went into the process affirming our commitment to remain connected as a family. Opinions from ex-wives and spouses definitely complicated things, but in the end we all agreed to stick to the rules." Entertainment $3 off popcorn and soft drink combos See more Entertainment offers > Even in relatively uncontentious situations, in-laws are often considered outlaws. “Spouses change the equation when dealing with trust and estate issues, especially if they are whispering in the ear,” Hausner says. “If you've had clear conversations about the plan, it's harder for someone to try to do a grab. Typically, spouses need to hold their words unless there is something absolutely horrible going on." Obviously, the entire process of dividing an estate is made easier if parents have enough money to support themselves. It's when the children are supporting the parents in unequal ways that serious tensions can arise around estate decisions. AARP NEWSLETTERS %{ newsLetterPromoText }% %{ description }% Subscribe . “With gifting, it doesn't necessarily have to be exactly even. Parents can directly pay for things like education or family trips and can work out a way to balance things if one sibling is struggling and the other is well off. But in death, it's important to think about keeping it equal, because you won't be around to talk it out.” The exception to the rule of an equal split is if a family member is . And Hausner cautions that this exception should not include substance abuse or addiction, because a sibling with that issue has probably already taken resources. All of this points to the importance of taking a close look at the adult-sibling equation while you are hale and hearty. As we ourselves age, it's important to assess our children's strengths and weaknesses so that we can make smart, informed decisions when the time comes. Lillian Pailley of London recently endured a health care emergency with her husband, which gave her a preview of how each of her three sons would respond in a crisis that required them to pull together. Based on that unexpected experience, she is giving thought to how she might want to revise her wishes and estate when it comes to responsibilities. There is no time like the present. AARP NEWSLETTERS %{ newsLetterPromoText }% %{ description }% Subscribe AARP VALUE & MEMBER BENEFITS See more Health & Wellness offers > See more Flights & Vacation Packages offers > See more Finances offers > See more Health & Wellness offers > SAVE MONEY WITH THESE LIMITED-TIME OFFERS