The Final Countdown

Written by Denise Evans

“Parenthood...It's about guiding the next generation, and forgiving the last.”
Peter Krause

Estate planning is not all about making decisions to distribute wealth or minimise tax liabilities, it is the opportunity to resolve and avoid family conflict. As a parent who has acquired assets from working hard, you want to ensure that you help the next generation or two who come after you. You want to ensure that your children are protected from the potential ravages of poor decision making, whether that be about relationships or business interests. You may want to make sure that you provide opportunities for your grandchildren and more and more, you will also have to consider the support of your own parents. There is all of this to think about, as well as the fact that there may have been a number of relationship break downs which means reconfigured families and interesting combinations of relationships. Many such factors have to be considered when you make decisions about establishing family Trusts and even when you are making a simple will.

With people living to an older age, there can be 30 years after retirement where the money available to meet the costs incurred during that time must be stretched to meet those needs. Often children will have to support their parents during this time and that can be disproportionate due to the circumstances of the children – there may need to be adjustments after the parent's death to recognise the contribution made by a child. If the will was prepared on the basis of each child getting an equal share, it is likely there will be a dispute. With all of this complexity to manage, you need the support of trusted experts who can help you identify not only your legal responsibilities, but also to help you understand the possibilities of how you can address the wrongs of the past and create the rights for the future.  

Disputes can even arise before the death of a parent. For people who do not have a power of attorney over personal care and welfare and in respect of property, disputes can arise if the person loses capacity to manage their own affairs or make decisions about medical care and support for elder care. Some of the most bitter disputes arise about when or if to put a parent into care. Making decisions about who should hold the power of attorney should also include thinking about whether or not the person with that power is a person who is likely to create a dispute or encourage resolution through consultation and collaboration.

Sometimes despite all effort, family disputes will arise out of making arrangements for care of a parent or the distribution of an estate. At present, these disputes are referred to the Court. The Court process is expensive and drawn out. The results are predetermined by the interpretation of law. Where people have neglected the task of estate planning, there will be people who are not entitled to a share of property because of the outdated regime for distribution of estates under the Administration Act 1969. Many Judges try to encourage parties to resolve legal issues through mediation often at settlement conferences which are based on settling or distributing the resources. The Administration Act does not make any provision for rearranged families nor for families where a parent may have died leaving property to a spouse who is not a parent of the children. There are many sad stories of children who would be entitled to claim under their parent’s estate missing out completely because of the action of their parent’s spouse.

Estate planning is an opportunity also to address mistakes made by generations past. For example, adult children can rearrange the estate plans prepared by their parent's. These arrangements could provide for immediate benefit for a beneficiary to be added to a Family Trust or an advance made to children of a child left out of the estate.

Independent dispute resolution professionals can do so much for families. They will meet with all of the parties to find out about family relationships, why and how the dispute came about, and assist people to come up with creative solutions. For example, someone may not be able to stand their Uncle but will agree to the establishment of a Trust to ensure he is cared for and the balance after he has gone is used to educate his grandchildren. Dispute resolution professionals understand the legal issues related to family disputes, such as the need for the interests of infant and other beneficiaries to be considered when resolving disputes related to property owned by Trusts.

There are very few families that do not have disputes. If those disputes are not resolved, they cause children to lose connections with family for reasons they cannot even understand and affect the familial relationships of generations yet to come. In terms of preparing for ‘the final countdown’ it is pretty clear that making arrangements for intergenerational transfer of family wealth is a specialist area and good advice is paramount. 

About the author

Denise Evans is a Senior Resolution Practitioner and Client Director with FairWay Resolution Limited.

Denise has over 30 years’ experience as a lawyer, mediator and arbitrator, and she has vast experience in resolving family disputes including disputes about wills, estates and Trusts.