The Family Fight - Planning To Avoid It

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The Family Fight In The Media

The Edmonton Journal

Dividing An Estate Can Rip Even A Close Family Apart
Wills need to be clear and precise to avoid conflict

Lorrayne Anthony
The Canadian Press

TORONTO - They may be the picture of family harmony -- brothers and sisters who play together as kids and enjoy each other's company as young adults.

But that can all change on the death of a parent.

There could be room for discrepancy in interpreting what mom meant when she said her assets should be split evenly among the children.

Who gets the antique dining room set? Who gets great-grandma's silver tea service? And what about dad's war medal?

Besides, mom and dad paid for the first-born to go to Harvard University in Cambridge, Mass., while the other kids lived at home and went to McMaster University in Hamilton for a fraction of the cost. Shouldn't that enter into the discussion of who gets what and how much?

Wills need to be as clear and precise as possible to avoid disagreements that can escalate to the point where siblings don't speak to each other, says Les Kotzer, estate lawyer and co-author of The Family Fight, an estate-planning guide.

"There's always an assumption that the kids will work it out," said Kotzer, who's based in Thornhill, Ont. "What I tell people is that often it's not the kids that work it out, it's the lawyers that work things out. And when that happens (the children) don't have the same relationship they had before.

"As a wills and estate lawyer, I see the results of poor or no planning and how it can rip a close family apart."

Kotzer says that in recent years he's seen an increase in all-out feuds among siblings over estate issues, a trend that prompted him and co-author Barry Fish to write their book. And it appears the increased fighting can partly be attributed to demographics. In the next 10 years Canadians will experience the largest intergenerational transfer of wealth in the country's history, as baby boomers inherit millions from their penny-pinching parents, says the Ontario Bar Association.

"That was a saving generation," said Kotzer. Those who grew up during the Depression learned to do without. They darned clothes, drove the same car for years instead of leasing new and pricey vanity vehicles every few years.

"Their children, on the other hand, were the spenders who lost money on the stock market. You see big houses and fancy cars and you think they have money, but in reality this generation doesn't."

Kotzer recalls a client who came to him in an expensive car and wearing a Rolex watch. The man had lost everything in the dot-com crash. When Kotzer asked what he was doing for money, the man's wife replied that he was a "waiter." The lawyer was taken aback to learn that waiting on tables could bankroll such a wealthy lifestyle. Turns out the couple were "waiting" to inherit his parents' assets.

The problem is, many people assume they'll inherit a parental windfall while in their 40s or 50s.

But with life expectancies creeping up, most boomers will have to wait longer for less money.

The fate of a family business can also hinge on proper estate planning -- whether it's a corner store or a multibillion-dollar company.

A classic case is the Steinberg grocery-store chain based in Montreal, a $4.5-billion empire with 37,000 employees when owner and company patriarch Sam Steinberg died in 1978 without designating a successor.

His three daughters fought bitterly over how the company should be run, for a time speaking only through lawyers, says Gordon Pitts, author of In The Blood: Battles to Succeed in Canada's Family Businesses.

"In the end it tore the company apart, and they eventually sold it," says Pitts. "There was no other resolution."

The sale turned out to be a disaster. Steinberg's went bankrupt under its new owner and the stores were sold off among a number of competitors.

"Sam Steinberg couldn't pull the trigger," says Pitts. "He couldn't resolve the estate-planning issues."

And when businesses crash this badly because of family feuds after the owner's death, the wounds don't heal quickly.

"Very often it takes another generation before people start talking to each other again," says Pitts.

 
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