Bequeathing Your Values

Other parents leave the business in equal shares to each child, regardless of who works there. The heirs who work in the business maintain control of the firm, however, and gradually buy out the children who aren’t involved.

Still other parents estimate how much value an adult child has added to the family company. They then give that child the earned equity, subtract that equity from the firm’s value, and divide the remaining amount equally among all the heirs, including the child who works for them. “A kid may see himself as having made more of the value of the business than he really did, but it’s still good to mark the difference between what’s a gift and what’s yours because you earned it,” says Darryl Meyers, a senior regional trust manager at Wells Fargo in Minneapolis.

The question of who earned what can roil clans without a family business, too. “Maybe one child was the caregiver for the parents,” Wenner says. “It’s not that the parents love the other kids any less, but they feel that the caregiver should be rewarded.” Or a family might include a seriously handicapped person. “Maybe a grandchild has Down’s syndrome,” Wenner says. In that case, parents often decide to leave more money in trust to that child than outright as they would for other children.

Who Gets the Cabin?

It’s not just money that invites family disputes about fairness—sentimental objects can set off civil wars, too. Sharon Olson, a principal at the Bloomington-based financial planning firm Olson Weiss, LLC, remembers a family that had a plate that said “You Are Special,” which they used for serving birthday cake. “Everyone wanted that plate, and there was no specific person listed as the beneficiary,” Olson recalls. “There were arguments around it, they tried to have meetings but they were too upset, and the upset boiled over into other areas.”

Many families fight over things “that can’t be replaced or easily divided,” Lamm says. In Minnesota, heirs often argue over the family lake home. “You might have two kids living elsewhere who don’t use it and don’t want to pay for the upkeep, and three kids who think it should be theirs and don’t want to share it,” Lamm says. “We have seen very modest lake homes, worth maybe $100,000, and each kid spent far more than that in legal fees to fight for it.”

Other families find trouble in a jewelry box. “I see a lot of women wanting jewelry to go to their daughters,” says Susan Stiles, president of Minnetonka- based Stiles Financial Services Inc. “They don’t look at the jewelry as having a dollar value—it’s more personal.” But that jewelry might have significant monetary value. If a daughter gets both the jewelry and an equal share of all the other assets, the rest of the family may object to the unequal distribution.