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Inside thestar.com

The collision of family and money

2007/01/14 13:37:54
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By Ellen Roseman Personal Finance Columnist
My three younger brothers and I just celebrated a milestone. We closed out our mother’s estate and distributed the proceeds.

Best of all, we’re still talking to each other. No lawsuits, no feuds, no punishing silences, unlike what some siblings go through after the last parent dies.

But I can’t deny we had some differences of opinion and bruised feelings.

Adults often revert to childish behaviour when family and money collide. It’s hard to act grown up when you’re dividing your parents’ belongings and long-buried sibling rivalries come into play.

“Even from high-class people, you wouldn’t believe the shenanigans,” says an antiques dealer in Arthur Miller’s play The Price, “They’ll pay a lawyer $5,000 to fight over a bookcase worth 50 cents — because, you see, everybody wants to be number one.”

My mother’s will left everything equally to the four children. There were no disputes about splitting the unsplittable — a family business, for example, or real estate — because there were no such assets to worry about.

With the valuable possessions left to us, such as antique furniture, china and silver, we worked out a plan to take what we wanted and compensate the others — or sell things and share the proceeds.

None of this was easy or quick. My brothers and I kept in touch for almost two years talking about papers to be signed and decisions to be made.

I hope we don’t drift apart, now that our parents (and their possessions) no longer force us to stay connected.

The collision of family and money is the subject of our next series of Sunday columns. We’ll look at the inheritance boom, an estimated $1 trillion transfer of wealth from affluent seniors born before World War II to adult children born afterward.

We’ll also examine the way spouses act with each other when they split up, often engaging in long, drawn-out battles over division of family assets and child custody.

Succession planning for a family business is another timely topic. Many owner-managers keep working into their 70s or 80s, often reluctant to pass on their cherished enterprises to children or spouses or skilled strangers.

We’ll talk to the professionals who try to head off family fights about money — or to prevent fights that have already erupted from becoming even more bitter and caustic.

Lawyers, accountants and financial planners all do their share of work with feuding spouses, estranged parents and children or rival siblings.

Some set up full-time practices to help mediate these disputes and get written appraisals of the assets that give rise to them.

Members of the Canadian Institute of Chartered Business Valuators are often called in when families go to war with each other over financial support.

They’re skilled in valuing a business, real estate or any other assets that can give rise to generational conflicts.

“A lot of people don’t deal with this at all. If they did, there would be fewer family feuds,” says Farley Cohen, senior principal in the Toronto office of Kroll Lindquist Avey and a CICBV member.

“If people start planning earlier, and put succession plans in place properly ahead of time, things can be a lot smoother.”

You don’t have to look far to find media reports of celebrity families fighting about money.

Brooke Astor, a New York socialite who’s now 104, has a fortune worth $120 million (U.S.). Her son, Anthony Marshall, 82, was accused by her grandson of plundering her assets while letting her live in squalor.

The allegations of “intentional elder abuse” didn’t hold up in court. But the judge ordered Marshall to return $11 million in cash, jewellery and art to his mother.

In a Canadian saga centring on the prominent Webster family of Montreal, Eric Webster died in 2003 after amassing a $24 million (Canadian) fortune. In his will, he set aside money to care for his widow and gave the rest to a foundation that supports a variety of charities.

He left no money to the couple’s children. But one of his stepsons is leading a bid to override the will and take control of about $12 million of Webster’s estate.

There was also a dispute about the ownership of 133 artworks in the Beaverbrook Art Gallery of Fredericton, N.B., after the British grandson of Lord Beaverbrook claimed the art (worth $100 million) was on loan and subject to return. The board immediately resigned.

We can expect to see more such disputes in future — and not only among the super-rich.

Middle-class adult boomers will be receiving substantial sums from their parents. The circumstances of life, such as housing costs, have changed to make boomers seriously dependent on those sums.

This is causing conflict and distress in many families, says University of California sociologist Marcia Millman in her book, Warm Hearts and Cold Cash (published by The Free Press in 1991).

“Parents and their children don’t know and often disagree about what is owed to adult children, or the best way to make those gifts, or how to divide this wealth among children with different needs,” she writes.

Family money is viewed as a special kind of money and takes on many symbolic meanings beyond its actual cash value.

That’s because family money is so tangled up with love and our feelings about how well or how badly we’ve been treated by those we love.

“But since family money is becoming increasingly important in our lives and relationships, it’s time we faced up to it,” Millman says.

“Being explicit about money doesn’t have to corrupt our relationships. It can enhance them.”

• Next week: How to start a conversation about estate planning with your parents or children.

You can reach Ellen Roseman by writing Business c/o Toronto Star, 1 Yonge St., Toronto M5E 1E6; by phone at 416-945-8687; by fax at 416-865-3630; or eroseman@thestar.ca by email.

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