WCR PHOTO | CHRIS MILLER
Lawyer Brad Cody advises clients to tell their children why you've decided to do things the way you have.
ST. ALBERT – Worldly goods that an individual gathered over a lifetime are often dispersed upon his death in ways their owner never intended. This is especially true if no legal will has been prepared.
Brad Cody, a lawyer with the St. Albert-based Cody Law Office, said every adult should prepare a legal will that reflects his or her individual circumstances and expectations. Otherwise a family feud can erupt.
“If you lent a child a significant amount of money and if you expect that money to be repaid or deducted off of that child’s inheritance, a will is the best way of dealing with those kinds of things,” said Cody.
There are ways family members can navigate their way through the inheritance process. While legal wills do not prevent all family conflicts about inheritance, they certainly present a major starting point for a resolution.
A will appoints an executor and a guardian for children. The will outlines the manner in which a person’s assets are to be distributed.
Cody said families should manage expectations, and have everything completely open and transparent.
“Tell your kids why you’ve decided to do things the way you have so everyone is aware of it,” said Cody, a parishioner at Holy Family Parish in St. Albert.
“They might not be happy about your decisions, but at least they will know why mom and dad did something and some thought went into it, and it was not an underhanded scheme hatched by one of the siblings.”
In some families, the amount of household wealth resulting from inheritance can be considerable. Its impact on family members can also be quite powerful, and a battle for this wealth can ensue.
When misunderstandings and disputes arise among family members, the result is thousands of dollars shelled out in unnecessary legal fees.
Cody spoke of a court case he has been involved with where parents loaned money to two children. One claimed that he paid the loan back, and the other did not. Then the questionable bookkeeping records came into play, and the issue among siblings turned contentious.
“There’s nothing wrong with helping your kids out, be it by a loan or a gift. But you want it recorded so that everyone’s expectations are clear and clean and you can avoid the surprises. Secrets are rarely good,” said Cody.
“If the expectation is communicated where everyone in the family knows that this was or wasn’t a gift, the problem is largely resolved.”
Remember what is important. Sometimes family members get caught up in winning the battle over the inheritance, arguing and suing each other over money that quickly gets consumed in legal fees. Once the battles are over, their relationships may remain broken, never resolved.
“If you’ve got someone in your family who wants to fight about stuff, they are going to find stuff to fight about,” said Cody.
Recognize that the behaviour of others cannot be controlled. By letting go of any illusion of the ability to fix or change how others go through the inheritance process and spend the inheritance, family members can avoid the temptation to engage in a nonproductive struggle for power.
If a loved one dies without making a will, lawyers like Cody who specializes in wills and estate planning can help minimize confusion during the difficult process.
Likewise, if someone has a will but forgot to include certain costly items, those specific items might result in a fight for ownership.
“When the value is large enough, it ends up in litigation. When someone has borrowed a significant amount of money and it becomes a question of whether it was a loan or a gift, that’s going to be litigated,” said Cody. “If there’s enough money on the table, it’s worth taking a run at.”