It's Not About The Teacups

Proper estate planning may prevent family blowups.

by Stevie Casteel and Tish McDonald

July 1, 2008

A lthough your children have the occasional fight over the last ice cream bar in the freezer or over who has control of the television remote, by and large they get along quite well and all is happy in your family.

"My children are quite close," we have heard some of our clients say - that is, before the clients die and their personal property is divided among the children. At that point, all bedlam breaks loose if there is no clear direction about who gets what. Tempers flare and feelings are sometimes irreparably hurt - all of this could have been prevented had proper precautions and planning taken place while the parents were alive.

Often estate planning documents will direct the executor to divide personal property among the children with no other direction. In one of our cases, an appraisal of the personal property was completed, and the corporate executor suggested that one child (selected by a coin toss) select one item and, based on the value of that item, the second child could select one or more items with a total value the same as the first child's selection. Then the process would reverse itself with the second child making the first selection.

Not only could the two children not agree on the method of selection (including who went first in the coin toss), they could not agree on any manner of selection. The division of the personal property ended up being done by means of a lawsuit, and the attorneys were paid hundreds of thousands of dollars before the case was settled.

Don't think that the feuding really has to do with who gets the teacups. Often, the fight over the teacups symbolizes long-held feelings of sibling rivalry, whom father loved best, or whom mother ignored.The items are all that is left of a deceased parent, and if there are unresolved issues in the family, they often will arise during the estate administration - a time of much emotion and sentiment.

Children often play out a family's dysfunction when dividing the parents' personal property. Also, many cases arise because a son's wife does not get along with his sister. Don't underestimate the power of spouses to add fuel to some smoldering embers; it is best if they are not present and do not participate in any type of personal property selection.

In another case, the daughter always felt that her parents loved her brother more and that he could do no wrong. When her parents died, the will directed the corporate executor to divide the personal property equally between the two children, again with no further direction. It was very important to the daughter that she receives certain sentimental items of her father's because they would represent the love the daughter craved.

Once again, an appraisal of the property was obtained, and the children were asked separately to mark the items they wanted. Only about a dozen items were the same, which surprised the children, and they now are negotiating over these items.

This method of division worked because the siblings were not able to fight over an item merely because the other wanted it. Because there were only a few items they both wanted, much pressure was relieved, and the siblings could communicate better about these few items. But what if many more items had been disputed?

Ideally, while alive, parents will communicate with their children about the division of personal property after their death and might even reach some sort of consensus about an appropriate division.

Memories fade, however, so it is best to put your wishes in writing, preferably in your last will and testament. Or give away some of the more important personal property items currently so that it is clear that both the giver and the receiver agree on the items wanted by each child. It may be that even with a written list, the parent has not correctly remembered what item may have been important or meaningful to each child.

There are other things you should understand and consider:

• Often wills refer to a separate letter or list distributing personal property. Georgia law allows this incorporation by reference, and most executors will respect this arrangement, but realize that unless this separate document is executed with the same formality of a will (i.e., in the presence of two disinterested witnesses, etc.), it is not legally binding on the executor. If you anticipate a fight among your children, you may want to list the distribution of items in the will itself.

• If you leave a specific item, such as your 2-carat emerald ring, to a particular person, and you no longer own that ring at your death, say you sold the emerald ring and replaced it with a blue sapphire ring, that person is not instead entitled to the substituted sapphire ring.

Under Georgia law, if you leave a specific item to a person and that item is not part of the ultimate estate, the person who would have been entitled to the specific item receives neither cash nor another item that is similar to or replaced the missing item. So if you mean for Junior to receive the car, regardless of whether the car you own at your death is a Cadillac or Audi, then leave him the "car I own at my death."

• Don't assume that your son does not want certain personal items, such as jewelry. It may be that your son will have daughters who will want a piece of jewelry that belonged to grandma. On the other hand, if your son does not have children, items that your son receives may end up passing outside the family line, which could cause resentment within the family.

Likewise, if you are in a second marriage and you and your spouse have blended families, is it clear what personal property is yours and will pass to your children and what property is his and will pass to his children? Or worse, does your will provide that the personal property will pass to the surviving spouse, such that the children or the second to die will receive it all?

What is important is to think about what you want to have happen and provide for this in your will. If there are specific items you want to pass to specific persons, provide for this in your will. If instead you want your children to decide, provide for a method of selection and distribution of the personal property an give your executor the power to break a tie or be the ultimate arbiter of a dispute.

If you are willing, give items of particular sentiment or value to your children during your lifetime and in consultation with them. In this manner, there is no mistaking your intent or the preferences of your children.

Or if you would rather not yet part with these items, at least consider talking about this with your children.

A discussion now may prevent a painful dispute arising after your death.

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Stephanie (Stevie) Casteel and Tish McDonald are both partners with the law firm of King & Spalding LLP. Casteel specializes in estate planning and exempt organizations, and McDonald specializes in fiduciary and business  litigation.