How to Divvy Up What Your Heirs Want and Get Rid of the Rest

Family discussions should include items that can have significant monetary value—like precious gems, art collections, and antique furniture—as well as possessions like family recipes, serving pieces, costume jewelry, or trinkets that may be worth little monetarily, but are treasured by children nonetheless.

“Some of the stuff that people fight over, you couldn’t sell at a tag sale,” says Jennifer Galvagna, head of trust, estates and tax solutions at

Bank of America
.

Here’s how to work through what can be complicated and contentious familial issues:

Communicate early. Families have different dynamics, and open communication isn’t always easy. But when it comes to dividing possessions, having frank discussions can mean the difference between a smooth transition and a battle that can be prolonged and emotional as well as costly, especially if courts are involved, financial advisors say.

An ideal time to start having these family discussions can be after children graduate from college, says Indrika Arnold, senior family wealth advisor and principal in the Concord, N.H., office of The Colony Group. While these conversations can sometimes be uncomfortable, planning ahead can alleviate the potential for hurt feelings and decrease the likelihood that beloved family heirlooms will be discarded or sold.

Consider feelings. When making decisions about your belongings, it’s important to consider how all family members might view the inheritance. Otherwise, people can make decisions that leave some heirs feeling slighted, even though that wasn’t the intent. 

Arnold offers the example of a grandmother who left jewelry to grandchildren she had been living with, to the dismay of her other grandchildren, who also wanted something to remember their grandmother by. Because it wasn’t communicated in advance, resentment lingered, Arnold says. While you can’t eliminate the potential for hard feelings, discussing her intentions while she was alive might have prompted the grandmother to come up with an alternative plan so her other grandchildren, whom she loved dearly, didn’t feel slighted. 

“To the extent that you can leave things clean and simple for those you leave behind, that itself is a gift,” Arnold said.

Make a comprehensive list and keep it updated. Daniel Milan, managing partner at Cornerstone Financial Services in Southfield, Mich., tells clients to list their tangible items, along with who should receive each item, their relationship and their contact information, and the date the item was added to the document. The list, which can be updated regularly, should ideally be broadly referenced in a person’s will or living trust and stored with the estate-planning documents so the executor has a road map to follow.

Have valuable items appraised. Families should have valuable items appraised to understand their worth. This can help ensure estates are divided fairly, financial advisors say. For instance, a parent planning to leave expensive jewelry to one child, might want to compensate by leaving another item of similar value to a different child. Some parents may not want to share their intentions with their children, but it can make for fewer hurt feelings and misunderstandings later, financial advisors say.

“Particularly in families that don’t get along well, it’s better to have these discussions prior to a death so there’s no surprises and no room for arguments later,” Galvagna says.

Don’t underestimate sentimentality. It’s a common mistake, but families shouldn’t underestimate sentimental value. Galvagna offers the example of a high-net worth family that had an inexpensive turkey platter they used on Thanksgiving. The picture of the turkey had almost completely faded, yet the children all wanted the platter because of the memories associated with it. By having discussions ahead of time, the family was able to reach a consensus, and the platter went to the child who did the most hosting.

Ask children for input. Parents sometimes leave possessions to their children thinking they will share the parents’ affinity for them, but the heirs may have little or no interest. Galvagna offers the example of an expensive seashell collection that parents assumed their children would want. After the parents died, the children, who didn’t want the collection, donated it to a science museum. Had the parents realized the children weren’t interested, it’s possible they would have chosen a different home for it, Galvagna says. 

She offers another example: of an antique dining room table that had been in a family for generations. The parents assumed one of the children would take it, but none of them was interested, and it was sold at auction. Had the parents broached the subject ahead of time, it’s possible another family member could have taken it. “It could have been a discussion point,” Galvagna says. 

One tactic could involve asking family members to lay claim to items that interest them, using different color stickers. This process can be awkward but useful, as it was for a woman who was selling the marital home and downsizing after her husband’s death. The exercise helped her determine what would go to her children now and what they would inherit later, Galvagna says.

Look for ways to compromise. When you plan in advance, there may be more ability to develop solutions that satisfy all parties. One father made a list of all his artwork and asked his four children which pieces they wanted, says JR Gondeck, managing director with The Lerner Group at Hightower Advisors, which has offices in Deerfield, Ill., and Boca Raton, Fla. 

Because there was overlap, the family came up with a solution that satisfied everyone—a rotation arrangement that allowed each child to have the desired pieces a few months of the year.

Had the father not done this, there could have been fights after his death, Gondeck says. “Being proactive with communication helps avoid the pitfalls after death that are common in families that don’t communicate. You could be dealing with 50 years of hurt feelings,” he says.

Advance planning can avoid other unwanted complications. Gondeck worked with a family whose lake home carried significant monetary and sentimental value. But only two of the family’s four children could really afford the upkeep, and even they worried it might eventually become a burden. Rather than sell the property outright, the parents decided, after family discussions, to put money into trust to pay for the future upkeep, so it wouldn’t fall to any of their children. If the siblings ultimately decide to sell the property, the proceeds would be split among the children.

Determining this while the parents were alive helped alleviate financial and familial issues that could have bubbled up if two of the siblings were left to foot the bill for the lake house. The siblings could have even lost the house, which none of them really wanted, Gondeck says.

Not planning can lead to grasping at straws—literally. Milan, who is also a practicing estate-planning attorney, recalls siblings that ended up drawing Popsicle sticks to determine who got to pick first, second and third when divvying up the family possessions. The siblings were already on bad terms, and the asset-division process—which included name-calling and siblings accusing each other of picking items simply so others couldn’t claim them—likely made the situation worse, he says. 

“Having a plan to divide tangible assets is something many people don’t think about when they are doing their estate plan,” Milan says. “It’s an undervalued piece of the process that has a ton of value.”

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