The Globe & Mail

Don't Let Estate Spark Family Feud

Carolyn Leitch
The Globe and Mail

Julia Walker recently inherited her mother's treasured collection of jewellery. Now she has her mother's favourite pieces, but fears she will soon lose her brothers.

Ms. Walker (not her real name) has been receiving increasingly nasty e-mails from her brothers demanding that she part with some of the jewellery or have her father compensate them for its value.

Last week, she appealed for advice to Les Kotzer, a lawyer at Fish & Associates in Thornhill, Ont., who sees this sort of thing all the time.

Indeed, wills and inheritances have become so increasingly fractious, Mr. Kotzer teamed with partner Barry Fish to write The Family Fight: Planning to Avoid It as a guide to maintaining harmony.

"I've seen terrible fighting over personal possessions," Mr. Kotzer says.

In the case of Ms. Walker, he suggests she might be better off to try to work out an agreement with her brothers before the family rift cannot be healed. He says the brothers' actions may look like bullying, but a court battle would be worse.

But he also points out that the mother, who made it clear to friends that she wanted her daughter to have her jewellery, does not appear to have explained her reasoning to her sons. Some of the bitterness might have been avoided if she had.

Mr. Kotzer says many people who do have wills focus on minimizing taxes in their estate planning instead of avoiding disputes. He knows that estate planning can be a difficult subject for many people to face, but he believes more people would tackle it if they knew how vicious family feuds can become.

"This is a very important thing to parents - that their kids not fight - and yet I see a lot of children fighting."

Mr. Kotzer adds that many people who are elderly now lived through the Great Depression and the Second World War in their youth.

They were the coupon-cutters and savers who often now have considerable assets.

If you do not have a will, Mr. Kotzer says, the law of your province will set out who benefits after your death. If you die leaving a spouse and children, most provinces do not give your spouse your entire estate.

"This can lead to conflict between your surviving spouse and your children," Mr. Kotzer said.

In addition, if there is no will, there is no executor appointed. This means someone must apply to court to obtain authority that should have been conferred under a will.

Worse still, you have not appointed a guardian to look after your minor children.

"You are creating a potential nightmare for your family," Mr. Kotzer says.

He recommends that people also have in place a continuing power of attorney for property and another for personal or medical care in the event that they become sick or unable to make their own decisions.

In some provinces, the Living Will is one component of the power of attorney for personal care, while in other jurisdictions it may stand as a separate document.

The Living Will lays out instructions for medical care, and helps to alleviate some of the stress on the family if they have to make decisions for a loved one who suffers extreme physical or mental disability and whom doctors believe has little or no chance of recovery.

When it comes to drawing up the will, Mr. Kotzer suggests parents with more than one child set up a democracy by naming co-executors. He also recommends that parents aim for a fairly equitable distribution because one child can feel slighted if he or she receives less than others in the family. He points out, however, that the split will depend on family circumstances.

"Equality is not always fairness."

Mr. Kotzer also recommends against cutting out one child entirely. If parents are inclined to do so, they should first check with the other children, the lawyer says, because they will be the ones left behind to deal with the situation.

"I would tell my Dad, `No way - you're not giving me more money, you're giving me more heartache.'"

Such situations are often the ones that end up in court, he adds.

Howard Black, chairman of the trusts and estates section of the Ontario Bar Association, estimates that only about 50 per cent of people have a will.

Mr. Black, who practises law at Minden Gross Grafstein & Greenstein LLP in Toronto, adds that a poorly drawn will can give rise to conflict because it is open to interpretation and opens the door to a court challenge. He has acted as a mediator in many disputes.

"I love poorly drawn wills because they usually give rise to some litigation and some mediation work for me."

He recommends people avoid do-it-yourself will kits and visit a lawyer instead.

Mr. Black believes we do live in a more litigious society, as people become more aware of and assertive about their legal rights.

He also notes that people are seeing a large transmission of wealth from one generation to another because of the way real estate, stocks, bonds and other assets have gained in value over the past several decades.

Mr. Black says battles often emerge from injustices that date back decades - even to childhood.

"In many cases the motivating factor is not a legal issue, it's an interpersonal issue."

As a result, he cautions clients to be careful about treating children unequally.

But, Mr. Black says, parents may decide to leave more to one child than another for a number of reasons: The parents may decide to leave the family home, for example, to a single parent who doesn't own a house rather than a married sibling who does.

"In some cases, there's a huge disparity," Mr. Black says. "This one may never have the financial backing to have a home, while the other one has a home."

Parents who decide to provide more to the child who has less should make the reasons for their decisions clear in order to avoid family fights, he says.

"In that case, document it properly."

When parents have valuable assets such as art and antiques, Mr. Black recommends having the items appraised. He warns that a huge discrepancy in the value of items left to different children can lead to challenges.

Mr. Black adds that family roundtables can sometimes be helpful, but he's skeptical as to how honest children will be in such discussions.

"In theory, it provides an opportunity for there to be dialogue. In my experience, many families are not comfortable having that discussion."

Mr. Black adds that children who are married may say one thing in front of the family, and another when it comes to settling the estate and their spouses get involved behind the scenes.

"The influence of in-laws often weighs heavily in these disputes."

Mr. Black recommends people have a dispute-resolution mechanism in place in case conflict does emerge. Heirs might disagree about whether to sell a house or cottage, for example. To resolve the dispute, he recommends parents appoint a third party such as a lawyer, accountant, relative or close friend to make a binding decision.

Make sure it's someone that all of the children respect, and they will probably go along with the decision, he says.

"The alternative is, you end up in court."