Keepsakes and Communication: Proven Ways to Prevent Conflict
There is a common perception among wealthy individuals that the greatest source of conflict after a family matriarch or patriarch dies is the distribution of the family fortune. And no wonder. Emotions and anxieties are often most intense during the grieving period immediately following the death of a senior family member. The high-profile and infamous cases of the Pritzker family (Hyatt Hotels), the Perelman family (Revlon/Hudson Media) and the Carlson family (Carlson Travel) suggest it’s impossible to avoid infighting and accusations in assigning fair shares of an estate’s wealth.
However, in our experience, the distribution of personal possessions is even more emotionally charged. In fact, as a notable Allianz study* found, these issues are five times more likely to be the greatest source of conflict during a legacy transfer than the distribution of finances. In other words, “Money is not the root of all conflict.”
Sentimental value based on childhood memories and parental bonds often far exceeds any objective economic value. Further, heirlooms and keepsakes are not easily divisible among multiple heirs. It’s easier to split cash fairly. That’s why all families — especially wealthy families — should plan in advance about how personal possessions will be distributed.
So how do you think ahead? And what steps can families take now to reduce future conflicts?
Simple communication is a great place to start. We recommend open family discussions. Typically, several conversations are necessary. For instance, a series of one-on-one conversations –parent to child or, if appropriate, grandparent to grandchild – can start the process. The objective is to identify the most valuable items for each individual heir, while balancing the goals of the previous generation. Ideally, a formal family meeting will be held, where heirs openly discuss the items that are most valuable to them and the matriarch/patriarch clarify their plans and intentions.
Holidays and major family events (like birthday celebrations, graduations or weddings) are natural opportunities to hold such discussions. For families that cannot meet in person, letters or conference calls can be useful channels. The format of communication is less important than ensuring that the information is clearly articulated and fully acknowledged by all family members while matriarchs/patriarchs are sill alive and everyone is exercising sound judgment.
Parents should not assume that “nobody wants any of this stuff” and children should not take for granted that everyone else in the family thinks they deserve the painting, piece of furniture, necklace or other keepsake to which they are most attached.
Though the Allianz study is a few years old, its findings still pertain. “Discussing all elements of a legacy now, before sickness and death cloud the judgment and aggravate everyone’s emotions, can help reduce conflict and anger.”
The bottom line is that a little bit of forethought in the area of distributing an estate can reduce a great deal of future friction.
*The Allianz American Legacy Study: The Seven Myths of the American Legacy, 2005, based on a phone and online survey of nearly 3,000 boomers and elders.