In a 1964 episode of “The Twilight Zone,” a group of sniveling siblings await the death of their wealthy father. They covet the riches they’re about to inherit.
But the old man has the last word: Before he dies, he asks his heirs to wear special masks that leave a lasting (and ghastly) mark. It’s a tale of greed gone awry.
The show touches on an all-too-common predicament that financial advisers confront. When drafting a will, clients sometimes decide to distribute their assets unequally. Perhaps they designate one heir to receive a disproportionate amount of money, stoking resentment among others.
That leaves the adviser in a bind. Wealth managers may urge a client to rethink an unequal division of the estate, warning that it can ignite familial conflict. But if they push too hard, they can alienate a client who feels strongly about how to disburse their money.
“It’s a whole witches’ brew,” said Leslie T. Beck, a certified financial planner at Compass Wealth Management in Rutherford, N.J. “We always tell clients to tell their kids in advance what they want to do. A lot of times, parents want to give more money to a less-advantaged child. That’s okay. But they have to explain it to the whole family. After you’re dead, you can’t explain it to them.”
Advisers don’t want to get caught in the middle. But in some cases, they can help families find a solution that appeases everyone. Beck cites the example of an elderly couple finalizing their will. The husband directed the bulk of his estate to his second son (with his second and current wife). This left his first son (from his first wife) upset.
“My role was to work with my client and his second wife,” Beck said. “We encouraged them to discuss their wishes with their children. We were also there to protect their right to determine what happens to their money,” while also trying to bridge family divides.
To her credit, the second wife did not want the first son to stew in anger. So she came up with an idea: She changed her own will so that the first son could inherit her apartment.
Of course, some parents do not make an effort to address an heir’s hurt feelings. Lingering bitterness can lead to litigation or a severing of family ties.
“So many issues come up that have nothing to do with money,” said Ed Gjertsen II, a certified financial planner at Engage Wealth Group in Northfield, Ill.
Like Beck, Gjertsen has found that navigating an unequal distribution of assets gets tougher with blended families. Second or third marriages introduce more opportunities for conflict to erupt among heirs.
When he confers with clients about their will, Gjertsen seeks to understand why they make their decisions. Learning their rationale for an uneven division of assets among children can help him suggest alternate solutions.
“We want to hear the client’s logic,” he said. “Equal doesn’t necessarily mean fair and unequal doesn’t necessarily mean unfair. We just want to know why the client wants to do that. Their answer allows us to share our experience and wisdom.”
If a client wants to leave more money to a child with special needs, for instance, Gjertsen might propose that they explore setting up a Special Needs Trust with an estate-planning attorney.
“They may not have known about this,” he said. “Things can go so poorly when they divide things unequally. Our guidance can be, ‘Please don’t do that,’” and instead find ways to address clients’ concerns.
Advisers sometimes double as life coaches or even amateur therapists. As parents ponder their legacy, they might reverse course repeatedly about the provisions in their will.
“Some clients keep making changes as their relationship with their children changes,” Gjertsen said. “We try to avoid having our clients make knee-jerk reactions. We might tell them to take a breath” before altering their will yet again.
Despite advisers’ best efforts, clients may choose to avoid discussing their wishes with family members. Having to tell an adult child, “We’re not giving you as much as your sister because of your drug use” or “We’re worried about your chronic overspending so we’re giving your brother more money” is just too painful.
For parents who would rather skip these conversations, Wendy Hartman suggests that they write a letter explaining their thinking and attach it to their will.
“That helps the trustee — or whoever delivers that message [after a parent’s death],” said Hartman, a certified financial planner at Buckingham Strategic Wealth in St. Louis, Mo. “Even if it’s an unequal distribution, at least heirs can read a parent’s wishes in their own words.”
More: Learn how to shake up your financial routine at the Best New Ideas in Money Festival on Sept. 21 and Sept. 22 in New York. Join Carrie Schwab, president of the Charles Schwab Foundation.
