New Jersey Star-Ledger

The Great Divide

Dole out the family treasures without destroying the family bonds

Sunday, January 25, 2004

By Christine V. Baird
Star-Ledger Staff

Undoubtedly, buried somewhere in a closet or drawer, is a stash of family photos, capturing a child's first steps, a bow at a school play, backyard barbecues and grinning faces with ice cream-covered smiles.

Reliably there, if unorganized, to preserve memories of family. But they can do more than that: For some families, they can help insure a future.

When it comes to estate planning and bequeathing personal possessions, begin by dusting off those snapshots. That's what estate attorney Les Kotzer, author of "The Family Fight: Planning to Avoid It," tells his clients. "My mother always said, her greatest jewels in her life were not in her security deposit box, but in her photo album," he said.

Keep those images in mind. Adding a line to your will that directs all of your personal effects, everything from heirlooms to old love letters, to your children is not enough. There is a lot to address and those who neglect to do so risk tearing their families apart. Although it might be startling, imagine those happy faces transmogrified by hurt, jealousy and greed.

"If there is going to be a squabble in a family over anything, it's not likely to be money," said Jeffrey Knapp, a Basking Ridge attorney specializing in estate planning and estate taxation. And lawyers see the battles firsthand.

"The fighting is unbelievable," said Kotzer, who recalls a client smashing a crystal vase so that no other sibling could have it. "The fighting it not just over the money, the fighting is over the memories."

When it comes to the stuff of life -- bronzed baby shoes, a grandmother's silver service, a comic book collection -- irrational emotions can get the better of people. Kotzer tells of one client who declared war on his siblings after his parents' vague bequest of personal items. "He was not going to let them go," Kotzer said, because they "smelled of his childhood."

It is possible to avoid such complete familial meltdowns. The first step is to get everyone talking. That's what Barbara Callan-Bogia and her siblings did at the request of their dying mother. "We really wanted to stay a family," said Callan-Bogia, author of the booklet "49 Tips For Determining Who Gets What," but it wasn't a easy. "We stumbled along the way," she said.

Reports of the great fortunes that Baby Boomers are destined to inherit may be greatly exaggerated. Some experts put it at $7.2 trillion over the next 50 years, but others disagree.

A weak economy and stock market, paired with a shrinking Social Security safety net and Americans' increasing longevity, has led some experts to conclude that most Boomers won't receive a penny, according to a recent article in American Demographics magazine.

Such news would horrify some of Kotzer's clients, many of whom, as he describes them, are waiters -- as in waiting for their inheritance. These are people who are "in hock and debt, and their salvation is their mother's inheritance," he said. It might shock them to know that what they stand to receive might be nothing more than the family dining room set.

Frank talk about legacies, particularly personal effects, is critical. Ways of bridging the gap between Depression-era parents and their adult children is the focus of Kotzer's book, which, he said, is written in plain language, not "lawyers' gobbledygook."

If parents can't get the conversation started, the children should. "The key is communication," Knapp said. "If there are going to be hard feelings, it is going to arise from personal property."

Most families will be able to talk, though roughly 10 percent will not, Callan-Bogia said. She recommends family meetings or requests by letter or e-mail from parents to their heirs asking for their involvement in estate planning. "If people talk about this, it goes a long way to avoid the fighting," Kotzer said.

And this way, when the time comes, there are no surprises. "When you pass, it shouldn't be Christmas morning," Kotzer said.

The best advice that lawyers have for people struggling with bequests of personal property is straightforward. "Smart people give it away before they die ," said Joseph Lambariello, an estate and taxation attorney in Bridgewater. "That way they know where it is going."

This applies to money, as well as the Tiffany lamp. Individuals are allowed to give $11,000 a year tax-free as gifts to beneficiaries. Kotzer recommends such "hollowing out" of an estate if, for example, you want to reward a devoted child over one who never calls or visits. That way, there is nothing for the no-show to get and he is none the wiser, he said.

Passing things along earlier can be very satisfying. "You can see the joy of your children or loved ones while you are still alive," Callan-Bogia said.

The next best thing is to inventory personal belongings of financial or emotional value. Check the list for gifts and return them to the givers. "Say, 'Take it, it's yours,'" Kotzer said.

Then, have antiques and collectibles, such as coins or Hummels , appraised. Check with online sources, such as eBay.com, or associations, such as the American Society of Appraisers (www.appraisers.org).

Allow heirs to pick from the inventory list. "Ask the child, what do they really want, because they could surprise you," Callan-Bogia said. No one in her family wanted their mom's Sebastian miniatures, so they agreed to sell them and split the profits.

Go through their wish lists, decide who gets what and itemize them in a binding memo that a lawyer can attach to your will.

Or better yet, let the kids hash it out. Callan-Bogia's family conducted an auction at which each sibling was given about $13,000 in fake money. "I have a desk that I paid $8,000 for with play money, but it felt like $8,000 (real money) when I was bidding against my siblings," she said.

In-laws, deemed "outlaws," were banned from participating, which was probably wise. "If there is a dispute, it's not necessarily the siblings going at each other, it might be the in-laws," Knapp said.

Callan-Bogia advises establishing firm ground rules. She tried to loan some faux cash to a brother and chaos erupted. "You would have thought I committed heresy," she said. But in the end, a good time was had. "We have wonderful stories," she said.

Realistically, however, there are going to be items that can't be divvied. A client of Kotzer had handwritten letters from Joe DiMaggio, Franklin Delano Roosevelt and a host of famous actors from the 1940s. "How do you divide up a letter?" Kotzer said.

Often, a heart-to-heart talk among siblings is the only way through to a solution. But Kotzer doesn't always see sweet endings. "Never assume good will between children," he said. Although, it is possible to force it from the grave.

Case in point: Kotzer recalled a terminally-ill client whose children were at each other's throats. At the reading of her will, she had Kotzer hand them family photos capturing the "little memories of childhood." Then, he read a letter she had written in which she reminded them of their once-happy family life.

The coldness between them melted, Kotzer said, particularly after hearing her final words: "I don't want you kids to fight," she wrote. "And remember, I am watching you."

What To Do

Be mindful of who the family givers and takers are. "People know who cause trouble," Barbara Callan-Bogia said. Expect them to act exactly the same at your death. Caregivers should be rewarded.

Don't leave it up to the kids. "In most of the cases that I see, it's not the kids that work things out, it's the lawyers," Les Kotzer said. "Once you receive a lawyer's letter from your sibling, it's not the same. You've broken the bond."

Treat all kids equally. If a daughter is more successful than a son, don't leave the personal stuff to him because you think he needs it. "What is that saying about the daughter?" Callan-Bogia said. "That your memories don't count?

Tell family members who the executor is. Naming co-executors isn't always smart. Callan-Bogia remembers a woman begging her mother not to do that. "I want to love my sister when this is over," the woman said.

Let heirs know how unwanted items should be disposed.

Be specific. If leaving something to a son, name the son. If leaving a piece of artwork, provide a description and location.

If there is a chance a bequest will no longer exist when you die, name a substitute item.

If you leave, for example, a valuable stamp collection to one child and the cash equivalent to another, make provisions to increase that cash amount if the value of the collection increases before you die. If you don't, "you create the exact inequality you were trying hard to avoid," Kotzer said.

If you leave a piano or other hefty gift to someone living across the country, specify who pays for the delivery.

If you leave sophisticated computer equipment or the like, provide information needed to use and maintain it.

If you leave a family business, provide a list of business partners, the trade shows you attend, etc.

If you leave a condo or other real estate, make sure the recipient can pay the taxes and maintenance. If the recipient has pets, be sure they are welcome or the person may not be able to live there.

When one parent dies, don't raid the personal effects. Doing so, you leave the surviving spouse with an empty house.

If in a second marriage, don't rely on a stepfamily to do right by the children of a first marriage. Protect them in your will. Some combined families think they are going to be "The Brady Bunch," Kotzer said, but it doesn't always work out.

To protect a second spouse, draw up a list of who owns what, then sign and date it. This way, if you leave all your personal possessions to your kids, they can't leave the new spouse with nothing.

Beware of terms such as antiques, memorabilia, collectibles, etc., as their meanings can be misinterpreted. "One word can destroy a family," Kotzer said. He recalled a woman who left her "antiques" to her daughter. Her son wanted a blue 1960s-style clock from his childhood, but the sister claimed it as antique. They stopped speaking.

Keep records of who got what, in case there are questions later. Make recipients sign and date it. This can head off trouble down the road.

To obtain a copy of "The Family Fight: Planning To Avoid It," by Les Kotzer and Barry Fish, for $19.95 (shipping included), call (877) 439-3999 or e-mail leskotzer@hotmail.com.