Why not? Because most of us have more than one child, and most of our children will get married and so bring an in-law into the family. It is a sad fact that money causes trouble in families. None of us like to think that our children will squabble over money that we leave to them, but sadly it happens again and again
Very often the child is who not done so well feels he/she should get more than his/her siblings especially if one of them is very successful. And it can be the reverse where the successful one has worked really hard and he/she does not see why his/her less energetic siblings should get any more than him/her.
And then there are the in-laws. They come from a different family, may have different values, they are not always aware of your family history, and how things work in your family. Many lawyers will tell you that a lot of the trouble around money and wills comes from the in-laws.
The good news is there are ways to prevent these squabbles or at least reduce them.
Tell your children from an early age that an inheritance is a gift, not a right.
Tell your children from early age that no matter what, they will get equal shares of your estate.
Tell your children when they borrow money from you, it will have to be equalised up in your will – if it has not been repaid beforehand.
I would tend to favour appointing your lawyer as your executor and not your children. The moment you appoint one of your children over another, you create a sense of inequality, and the others, no matter how gracious they may be, may feel a little bit strange.
Hopefully you have a lawyer that is younger than you and/or has younger partners. You can feel safe knowing you have good protection through the Law Society and most lawyers are well versed with wills too, and the problems that they need to avoid.
Enduring powers of attorney (EPOA)
An enduring power of attorney comes into play if you are unable to manage your affairs , due to a bad accident or ill-health. The person you appoint has all kinds of power and responsibility, and of course access to all your money and assets, so they need to be absolutely trustworthy.
Helen Clark’s government tightened up a lot on EPOA’s as there has been some elder abuse and some misappropriation of money. There are two parts to an EPOA:
Part 1 -you appoint someone to take care of your personal care & welfare e.g. someone who will arrange your personal care, such as choosing a rest home for you, checking that you are properly cared for, and so on
Part 2 - someone to take care of your property, which in legal terms means your money and assets
Again for the same reasons as your will, I would tend to favour appointing your lawyer as your EPOA for part 2.
Trustees in your family trust
The same story all over again. Trustees have a lot of power and if you appoint one of your children as trustee and not the others, you are again creating division and a “why was I not asked?” uneasy feeling amongst your other children.
Most trusts need at least two trustees, and one of them should be a person who is not a beneficiary i.e. cannot receive money from the trust.
Commonly trustees will be mother, father, and the family lawyer or accountant. However you need to document in advance a replacement trustee for yourselves in case one of you has died and the other is incapacitated, or both of you have died.
Probably you could appoint your lawyer or his younger partner, or your accountant if he/she is not a trustee already.
Being a trustee can be a big responsibility and a lot of people nowadays are not prepared to take it on. In addition your affairs might be complex enough to warrant a trustee who is professionally trained in these matters. Many legal and accountancy firms have set up trustee companies which is quite a good solution. You can use one of these companies as trustee, and if your lawyer/accountant is away/sick/ dies, the other trustees step in so there is no interruption of trustee services. Not free of course, but then anything done properly usually isn’t.
Most of us should review our wills and enduring powers of attorney every 3 to 5 years.
If you have appointed one of your children, do not worry or overreact . Consider what we have written and digest it slowly.
If you think you need to make some changes, meet with your lawyer/accountant and discuss it with them.
You can then make any changes that you deem to be necessary.