Where there's a will there's potential for acrimony
Like wedding fights, inheritance spats have a sordid, nightmare quality. A low-rent tussle over the loot can take a terrible toll on family ties.
Hopefully, you and your siblings are above such antagonism. According to financial planner Michael Miller, the approach most Australians take to dividing the spoils is "surprisingly benign".
Still, Miller says, unexpected outcomes can spark resentment towards the deceased or anyone who receives an unanticipated benefit. Cue a rash of late-night emails that escalate tensions.
The root of conflict, Miller says, is poor preparation. Often, the terms of a will only surface when the author is gone. Worse, the will only specifies how the estate is distributed, not why, leaving the reasons to the survivors' imagination.
A letter explaining the will's rationale helps considerably, Miller says. An advance discussion in the vein of the rich, who have long held conferences about bequests, is better still, he says.
Just keep an eye on the paperwork, because poor filing can derail all your efforts towards a smooth resolution. Consider that the executor - the person appointed to manage the deceased's estate - is under pressure to file final tax returns and track down assets and arrange their sale or transfer: a hard ask.
"Most of us aren't very good at managing our own affairs, let alone those of a now-deceased friend or relative," Miller says. "Remember that the period after your death is one of grieving and sometimes high tension." If your executor is struggling to find income tax and capital gains tax records, this will increase the angst and fuel complications, Miller says.
Like Miller, wealth coach Luke Lucas says the secret of avoiding messy courtroom contests is meticulous homework anchored in clarity.
"Writing a will requires the same thing a healthy marriage does: communication. You should ensure that you are as descriptive and detailed as possible," Lucas says.
That means: explain why you are leaving more to one relative than another. Ensure that the will accurately accounts for all your assets, avoiding complacency, because bitter precedents abound, Lucas warns.
"They're common enough that an entire industry has been built up around them and ugly enough to destroy families.
"Just ask Gina Rinehart," Lucas says.
Craig Wilford, from Nexia Australia, has some dos and don'ts when it comes to avoiding inheritance feuds:
Do plan, plan, plan Family issues arise when your will contains surprises or ambiguities. Take the time to detail exactly what you want to happen to your assets, how you want them distributed and to whom.
Do choose your executor carefully The task of administering an estate is an increasingly complex process. The person you pick to manage the process must be able to apply the necessary time to follow your instructions properly and promptly.
Do share the details of your will with your family members If you are worried about encountering resentment, or even interference, ask your accountant or solicitor to do the honours. Openness will reduce the risk of disaffected beneficiaries challenging the estate, which is costly and time-consuming for all.
Do review your will every two years, taking into account changing circumstances If you make alterations, remember to leave copies of the revised version with your family.
Don't just hope for the best and leave your family to deal with the consequences Unfair to your family, a cavalier attitude creates an unwarranted level of stress. If your family has no idea what you intended, that opens the door to an unpleasant dispute.
Don't allot disproportionate amounts or assets without explanation If you give more to one family member than another, explain to all parties why, so everyone grasps your intentions.
Don't go it alone if feuding breaks out over the will Seek professional help to resolve the dispute, or raw emotion might trigger a trail of destruction.