Estate planning should take sibling dynamics into account

Estate Planning
By Goodwin Como, P.C.

Families in Pennsylvania are just like families across the country. They are made up of imperfect people who have imperfect relationships with each other. One of the relationship dynamics in play in most families is sibling rivalry. Sibling rivalry should be taken into account when doing estate planning. There are some key approaches to doing so.

One good approach is to give the siblings gifts of money during their lifetimes. When a parent is in their waning years, with more money than they will be able to spend in the time they have left, giving gifts of cash can have multiple advantages. One is that the tax treatment of gifts can be better, up to certain limits, than the tax treatment of inheritances, depending, of course, on the size of the inheritances. Giving cash gifts to siblings can also help them know that they are cared about and reduce the tension between them.

Even after giving out substantial cash gifts to siblings, however, there will still be the rest of the estate to plan for. For example, there will be the money from liquidating investments and selling property. When it comes to the management of all of that, it is probably best to write into your estate plan that the executor will not be one of the siblings. After all, putting one in charge could easily alienate the others and revive old rivalries.

However, having a third party whom all the siblings like, trust, and view as fair can work out well. You may also wish to put into the estate plan that there will be a mediator who will work with the siblings to resolve any differences between them about the estate. You can also leave each key personal possessions that show how you valued them as individuals.