Signs: Avoiding Financial Family Feuds
COLLINS SPENCER, CNN ANCHOR: DOLLAR SIGNS is up next.
to DOLLAR SIGNS, where we help you make the most of your
money. Major changes in the family such as divorce or death
can cause squabbles over money. Some of the big mistakes
that lead to financial feuds: assuming that everyone knows
your wishes, ignoring your children's rivalries, and not
putting your wishes in writing.
your family is immune? What you hear over the next half
hour could change your mind. We have got two financial experts
to help you avoid the pitfalls that lead to clashes over
cash with us today. Jennifer Openshaw is head of the Family
Financial Network in Los Angeles. And Les Kotzer is a wills
and estates lawyer in Toronto, Ontario. He's the author
of "The Family Fight: Planning to Avoid It." And
I want to welcome you both to the show.
KOTZER, WWW.FAMILYFIGHT.COM: My pleasure to be here, Collins.
OPENSHAW, FAMILY FINANCIAL NETWORK: Nice to be here, Collins.
Good. Les, I'm going to start with you. Is fighting over
wills and estates common?
I'll tell you, Collins, my practice is dedicated to saving
families. I don't deal with taxes, my practice is strictly
about saving families. And I'm seeing so much fighting.
It's tragic what I'm seeing, brother against brother, sister
against sister. And my mom once said to me that her greatest
assets were not in her safety deposit box, they were in
her family photo albums, her children, the loved ones. And
we have to bring family back into estate planning. We've
lost that. We're so focused on how much money we're leaving,
the assets. We've got to bring family back, and that's what
I'm here to talk about today.
Right, and that's very good advice. Jennifer, why is estate
planning so much more important today, especially for women?
Well, Collins, if you look at the trends, women are earning
more, they're bringing more money and more assets into the
family than they used to before. More interestingly though
is that S10 trillion of assets will pass between the World
War II generation to the Baby Boomers. And guess who is
going to be passing that money? By and large, it's going
to be women. And if you look all over again, women tend
to be taking care of the financial issues after the passage
of their husbands. And most men will pass before their wives.
OK. Jennifer and Les, I have an e-mail from a viewer. Let
me read this from Kevin from Anchorage. Kevin says: "I
recently buried my father in California. The woman who was
his caretaker has power of attorney for his living trust.
Can she now control my father's assets after his death?
What rights do I have?" Who wants to take a stab at
Well, generally, a power of attorney passes away when the
person passes away, and then the trustee would look after
the trust. But it's complicated when you get involved in
living trusts. That's all I have to say to people out there.
Be very careful, go to a lawyer, let the lawyer help you
with this. Too many people are winging these things on their
own today and I think people like this have to go to see
a lawyer to really find out their rights in their particular
A couple things, Collins, if I could, that folks should
know about power of attorneys, is there can be limited ones
where somebody has authority to make very specific actions
or maybe even just for one day or over a short period of
time; and durable power of attorneys, where they have wider
latitude to maybe handle your investments et cetera. Typically
things are going to be spelled out in a trust or a will
and that would carry on past their death.
OK. And Jennifer and Les, we have Bruce on the phone from
Tennessee. Bruce, go ahead. CALLER: Yes. I was wondering
what grounds I have to recover insurance policies of the
co-executors of my father's estate? My sister and myself
are both co-executors, and she took all of the insurance
policies and cashed them in. In what way do I go to recover?
Well, an executor has an obligation to account. And it's
very important that if somebody has taken advantage of that
estate that you go to a lawyer and make some sort application
in your state to try to recover this. The problem is sometimes
once the money is gone, it's gone. So that's why it's very
important that people understand executors have to account
for beneficiaries, and they just can't take the money for
themselves. If you're named as beneficiary, you're entitled.
What's also really important to you, particularly if you're
going through a divorce, is that both spouses know what
assets the family has and what income stream they have,
because strange things have been known to happen and things
can disappear. But insurance certainly is part of the overall
estate and certainly should be part and disclosed as you're
going through the process.
How do you get people to understand you can't wait to do
Well, I'll tell you something. My practice, as I mentioned,
is about avoiding fighting. We wrote this book, "The
Family Fight: Planning to Avoid It," because there's
so much out there on how to save taxes. And so many people
are so turned off by the issue of tax that they feel that
this doesn't apply to them.
you'll see in the book, it applies to everybody. It can
happen to any family. I've seen fighting over personal items.
I've seen fighting lunchboxes. I had two brothers come into
my office, fighting over this lunchbox, a Howdy Doody lunchbox.
And one took a book off of my desk and threw it against
the wall just missing his brother's head.
have to understand that their most important assets are
family and they themselves can inadvertently leave the seeds
of the destruction of their own family, Collins. So often
I see parents who don't do a will, do homemade wills, make
bad assumptions, like assuming that their kids are going
to work it out. Well, in most cases that I see, it's the
lawyers that have to work it out because the parents didn't
do proper planning. It's tragic what I see.
We have got another caller in, it's Mike from Florida. Mike,
would you like to go ahead with your question?
Les, can you hear me?
Les, I have four siblings, we're in a probate situation,
equal share in the wills. One of the five siblings refuses
to accept his equal share. Have you ever encountered this
type of a scenario, and if so, do you have a tip for solving
Yes, I have. There are children that do want to renounce
their gifts, sometimes it's bitterness towards the parents,
or siblings, I don't need your help. I think you have to
talk to each other, because he may come back or she may
come back later and feel very bad of what she had done or
he's done to the family.
fact that you may just want to offer, say, look, we don't
want your money, it's yours, it belongs to you, or maybe
if you don't want it, how about your children? It belongs
to them. Because they may come back to you guys later, the
nephews and nieces, you know, you stole our money.
be very careful about that. My whole message here is we
have got to save the families. These families that we've
shared childhood with, the nephews, we don't want to go
to parties and have to avoid our families. And this is what
I'm seeing over and over again where parents call and tell
me, I don't want my kids to have to go to a party later
in life and never talk to each other again. And it's troubling
All right, great information. We're going to come back and
answer some more information for the viewers out there.
We have got two financial experts to help you avoid the
pitfalls that lead to clashes over cash with us today. And
that was Jennifer Openshaw and Les Kotzer. And we'll be
back to give you more information about avoiding your family
fights. You can e-mail us at email@example.com. DOLLAR
SIGNS, call 1-800-807-2620, and we'll be right back.
Welcome back to DOLLAR SIGNS. Death and divorce, they are
two of the most damaging things that can happen to a family.
They can also create major feuds over money. Family financial
expert Jennifer Openshaw and attorney Les Kotzer have witnessed
a lot of such feuds. They are telling us how to avoid them.
thank you for sticking around. I have got an e-mail from
Don. And I'm going to throw this to you, Jennifer. Don says:
"I am a single parent and pass away without a will,
does my estate go automatically to my two children evenly
If he is single, it would typically go to your children.
But if they're underage, typically what is going to happen
without having an executor is that the state is going to
decide how those assets will be distributed. You will still
have to go through the process. And so absolutely, if you
have kids, particularly again, under 18 and they may need
a guardian, you absolutely need a will. That will would
designate who the guardians of the children are as well
as the distribution of those assets. And you don't have
to spend a lot of money to do it.
Good. We have Terry on the line from Maryland. Terry, would
like to go ahead? CALLER: Yes, sir. My name is Terry Simon
(ph). And I have an uncle that passed, and he left his will
in secret with only the executive -- lawyer knowing what
is in there. And they will just say, well, you're getting
21 percent. But they're not actually disclosing what the
assets and the family is fighting over, what money is what.
But nobody knows except for the lawyer. So how do we get
that information disclosed to us?
That's actually -- I just want to point out something. Les
may want to mention it. But that's actually a great example
of why I think it's so important for parents, particularly
to sit down and share with their children what their plans
are, because it's going to avoid so many arguments down
think many people, parents assume that everything will be
fine, they ignore the sibling rivalries, as Les was mentioning
earlier. And there's no question that those feelings, those
emotions are going to come out later. And so first of all,
parents should put in writing what their wishes are, but
secondly, to share them with their children and other heirs.
I agree absolutely. And I think that it's important that
you contact the executor because as I said before, the executor
has to follow the will and the executor has an obligation
to account. My partner, Barry Fish, and I, we do a lot of
estates. And we -- you know, people call us and we want
to be open and we tell the executor, be open to as much
as we can with the beneficiaries, we don't want people dragging
the executor through the court.
you know, we have -- as I mentioned before, we have a book.
We also have a Web site, familyfight.com. If you want to
read stories about fighting over -- with executors and fighting
between brothers and sisters, Collins, I'll tell you something,
people e-mail us on our Web site, they can e-mail me direct,
my site is right on that site, familyfight.com.
they can tell us their stories. And if we can do any help,
or whatever we can do, we can e-mail back. But the fact
is we see this over and over again. He's not disclosing.
My brother won't tell me. Parents appointed only one sibling
and not the other two. So in one case we had to ask two
brothers to leave the room because the sibling who was the
executor said, I want my brothers to leave the room. And
we had to ask the brothers to leave.
the parents had to do in their will was put all three as
executors with a majority clause which would allow all three
to be in the room and two out of three make a vote. And
that would have created democracy. And unfortunately, parents
don't realize a lot of these things.
And I think sometimes -- by the way, I want to point out
that sometimes having multiple siblings as executors on
the other side can create some conflict. And so it may make
sense in certain situations to have a family friend or somebody
that you believe and also that the children believe will
be fair and appoint them as the executor. KOTZER: Absolutely.
But be careful in your own family of creating a dictator
of the executor. Your parents have to talk. And as a child
out there, if you don't want to be an executor, tell your
parents. There should be a communication now, it shouldn't
be a surprise on the death, oh, I'm an executor, what do
I do? There should be a communication throughout your life.
And if you don't want to do it, tell your parents now.
And Les, obviously, the cost can be very high too, to be
And I'm going to cut in here because our phones are just
blowing up. There are a lot of viewers interested in this
topic. We have Linda from Colorado on the phone. Go ahead,
Yes, my mother received an inheritance from my aunt. And
my sibling and my nephew are accusing myself and my husband
of unduly influencing her and her use of this inheritance,
and not advantaging that inheritance, you know, not having
it grow the way it should. And they want to sue us after
she is gone.
Are you the executor? I don't follow the question.
I am the executor, yes.
Well, an executor has an obligation to invest money, usually
it's prudently or wisely in investments. I don't think you're
under any obligation to make this grow 100 percent. But
again as executors there is liability. You have to make
sure those assets are protected, that there's insurance
on assets. It's not an easy job to be executor. A lot of
people think it's an honor. When you read the book, and
you go through some of these issues, realize it's not necessarily
an honor. There is a lot of obligation on the executor.
And what Les is referring to, too, is that obligations --
the fiduciary obligations that you as an executor have to
respond to as if it's your own money.
Jennifer, we're going to have to go to a quick break. We'll
be back, a lot of people interested in this. If any of these
scenarios seems familiar, or you're worried about your own
family financial feud, contact us. E-mail your questions
to firstname.lastname@example.org or telephone us, the number is 1-800-807-2620.
We'll be right back.
Welcome back to DOLLAR SIGNS. We're talking about how you
can avoid fighting over money when someone in your family
dies or get a divorce. Family financial expert Jennifer
Openshaw and attorney Les Kotzer are answering your questions.
Jennifer and Les, I have an e-mail here from Jay from Pittsburgh.
Jays says: "Is there a time limit to settle an estate,
and if so, what is it?"
It depends. In some jurisdictions it could be a year. I've
heard of other jurisdictions where it's less. There is what's
called an executor's year in a lot of jurisdictions. They
give the executor time to settle the estate, pay the debts,
I'm right with Les, and wrap it up, the sooner the better
is probably better for everybody who is involved just to
avoid sort of the anxiety and other emotional feelings that
OK. And we have on the phone Gloria from California. Hello,
Yes. I have income property, three adult siblings, two are
kind of professionals, one is a teacher and the other one
is business. The third has a mental disorder of sorts, and
he can't communicate very well. My mother left them a similar
property, and there was terrible consequences. It was income
property. They could not get along. The two adult ones came
to blows over the money, you know, received from the rental
properties. The third one didn't receive any money.
was set up for auto-payment, because it was not paid for.
I should not have, however I borrowed money for them on
my good credit record out of the property, because it was
clear when she died. They each got equal shares, I saw to
that, S40,000 or so apiece, and I put the property on auto-payment
for all of the expenses. However I'm 78, I got tired of
managing it. I turned it over to them, and there were dire
OK. Who wants to help her out?
I'll tell you, it's tragic to hear these siblings fighting.
What I try to tell parents and kids is that, you know, these
are the kids that shared the childhood, the kids that drove
to the Grand Canyon in the back of dad's car together. I
think it's time you start -- you know, in this situation,
for any siblings out there, if you're about to fight, to
look at your family photos, bring that back. I even wrote
a song that's coming out shortly called "Photos In
a Drawer" with the world famous Lou Mann (ph) and Wendy
Watson (ph) because I'm trying to practice a little bit
of emotional law, bringing people a little bit of heart
-- tearing at the heartstrings. When I hear these siblings
that are at war, they never talk to each other again. These
The other thing, too, is that your mother perhaps didn't
think of the worst case scenario. And that's what parents
really need to think about, is what's the worst case scenario,
that one of these properties generates more income than
another one, it goes up in value where one goes down in
value. Those are some of the things that I think folks need
to think about so that ultimately there's fairness and there's
less of that rivalry.
And equality isn't always fairness either in a will. A lot
of parents think if I just stamp an "equal" sign
in my will it is going to be fair and equal and the kids
won't fight. I've seen tremendous battles between kids where
it was equal, because one child was a caregiver and the
caregiver child says, it's not fair that I got the same
as my brothers who live in Europe and they only call mother
on Mother's Day. And I did all this work. So it's very important.
That's a really good point.
It's very important.
I've got a quick question. What about big ticket items?
And we only have a limited amount of time here.
Well, remember, there's one thing, you can never share a
painting on the wall or a table in the hall. And the fact
is, is that, as parents you have to pay attention to these
particular items. They're very important to these children.
Talk to your kids now and do it now. Don't leave this up
to chance. It shouldn't be a secret, it shouldn't be a surprise
on a parent's death.
OK. Jennifer, we've got to...
And real quickly, property, for example, if it's joint tenants,
that means that when I pass on, for example, it's going
to go to my partner, which is going to override anything
that's in a will. And that's very important for people to
remember, the same with investment accounts, if there's
a beneficiary listed, it will go there first .
All right. It was great to see both of you. Jennifer Openshaw
and Les Kotzer, great information.
We'll have headlines when we come back.