What if the estate plan that looks fairest on paper can be the plan most likely to create family conflict? If you have three children, giving each child one-third may seem like the obvious answer. That can work when everything is cash or another asset that can be divided easily. It becomes much harder when the family owns a business, farm, beach house, mountain cabin, or other property that requires ongoing decisions and shared responsibility.
In this episode, I explain how to think through those difficult choices. I use the public dispute involving the Buss family and the Los Angeles Lakers as an example, along with a composite family business story about Margaret and her three children. We'll look at three important questions: Who gets to decide? Who gets to benefit? When does the arrangement end? I'll also discuss ways to keep a business in the family, sell it, or allow one child to take over while the others receive their share.
Why equal inheritance can create family conflict
When everything is easy to divide, equal shares may be a reasonable plan. A family business or shared property is different because ownership also brings responsibilities, expenses, and decisions. Equal shares can create unequal burdens, and equal authority can create deadlock and drama in the family.
The children may live in different states, have different careers, or have very different levels of interest in the asset. A child who works in the business every day may not want siblings who know little about it making decisions. Giving everyone the same ownership does not mean everyone has the same experience, time, or goals.
Estate planning for a family business with different roles
I use the Morgan family as a composite example. Margaret built a successful landscaping company and has three adult children: Ben, Claire, and David. Ben has worked in the business for 15 years and expects to run it, Claire lives nearby but has never worked there, and David lives several states away.
Margaret loves all three children equally and wants each one to receive a third of the business. But when I ask whether Claire and David should help make business decisions, Margaret says no because they don't understand how the company works. That tells us something important: Margaret wants equal benefits, but she does not want equal control.
Who gets to decide, who gets to benefit, and when does it end?
Those are the three questions I want families to ask. Who gets to decide? Who gets to benefit? When does the arrangement end? Parents often answer the second question right away by saying that every child should benefit equally.
The more difficult questions involve control and time. Who can hire and fire employees? Who decides how much money stays in the company? Who approves major investments or distributions? The plan also needs to recognize that adult children have their own lives and may not want to remain tied together forever.
Planning for the children you have today
Margaret hopes that Ben, Claire, and David will work together after she is gone. But they already have different personalities and some friction between them. Ben is easygoing but stubborn, Claire becomes impatient with his slow and careful approach, and David keeps his distance because he is tired of the conflict.
Hope is not a plan. I encourage families to plan for the children they have today, not for the people they hope those children will become. Equal benefits may still be right, but equal control could place the children in a situation that makes existing tension much worse.
Why family conversations matter before making a plan
I once worked with a family that owned a farm passed down through several generations. The children loved the memories connected to the property, but none of them lived nearby or expected to use it. After talking with his children, the father decided to sell the farm rather than leave them with shared ownership, taxes, maintenance, and difficult decisions.
That conversation gave him more freedom to make a practical plan. A house, cabin, or beach condo may be deeply meaningful to one generation, but the next generation may see it as a financial resource that comes with work and expense. Finding out what your children actually want can prevent you from passing along a problem while believing you are passing along a gift.
Episode timestamps
00:00 Equality, shared property, and family conflict
01:10 The Buss family and Lakers ownership dispute
02:06 Separating decision-making from benefits when planning for framily business succession
03:43 The Morgan family landscaping business example
05:18 Why equal control may not fit the business
07:54 "Hope is not a plan"
10:07 The three questions every family should ask when planning for the famiy business
14:55 The family farm that the children did not want to keep
17:09 Seeing property as a financial resource
18:11 Ways to manage or divide a family business
20:21 Keeping ownership within the family
21:54 Planning realistically and talking with your children
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Meet Jim Miskell
Jim Miskell is the principal attorney and founder of the Estate Planning Law Group of Georgia, James M. Miskell, PC, and practices exclusively in the areas of Elder Law, Estate Planning, and Probate. Jim began his law career more than 30 years ago as an Assistant District Attorney, specializing in prosecuting crimes against children and special victims.
For the past decade, Jim has been in private practice as The Estate Planning Law Group of Georgia, James M. Miskell, P.C. and now specializes in wills, trusts, estate planning, and elder law, helping families plan for all stages of their lives.
No two families are the same and no two estate plans are the same. Jim believes that estate planning is most effective when you understand all of your options before making any major decisions. To that end, the Estate Planning Law Group of Georgia, James M. Miskell, PC, offers free educational workshops so that clients discover potential issues and options for their families. Then, in consultation, families can make informed decisions in planning for the future.
Disclaimer
The information provided in this podcast is for general informational and educational purposes only. It is not legal advice. If you need advice about your specific situation, please consult a qualified attorney licensed to practice in your state and experienced in the relevant area of law.
