Linda Rice Thorup and Lisa Rice Hayes grew up on a large rural family plot near Albany, New York. When both parents passed, they had the difficult task of dividing and divesting their lifelong family home. How to sell the land and respect their parents’ desires about conservation and development? How to handle a lifetime of possessions? And what to do about the one grandchild living there who was attached to the place?
Their story has a happy ending. Not only were the sisters close, but they had long ago worked out a division of duties and effective communication as their parents required more caregiving.
“A successful division of assets greatly depends on what happens before parents get sick or in cognitive decline,” says Rice Hayes, a former estate planning and administration attorney in Baltimore. “If siblings got along before, that helps mitigate some of the stress in dividing assets.” Rice Hayes had been overseeing her parents’ finances, so it was easy to handle that aspect when they passed away.
Any estate situation is eased with proper planning, ideally involving an outside professional — whether a banker, financial planner or lawyer — to help outline, mediate and document a family’s wishes. A third-party expert is that rational person in the room who doesn’t have a dog in the fight.
After a long stretch of traveling from out of state to shoulder caregiving responsibilities, Lisa and Linda decided to hit the pause button on selling the home. They were in a position to step back, take a break from the hard conversations and figure out how to divide things in a fair and equitable manner.
Get plans in writing
Not every story is so harmonious. When siblings are already counting on an inheritance, or their financial needs are different, it can get more complicated if wishes aren’t stipulated in black and white.
Lee Hausner is a Los Angeles–based psychologist and author of Children of Paradise: Successful Parenting for Prosperous Families, an instructional book about handling family assets. She recalled a situation where clients wanted her help distributing ownership of the thriving family business. During the discussion, she watched a physical fight break out between siblings about their mom’s foot stool.
“Parents should never divide an indivisible asset in hopes that it will bring their heirs together,” Hausner cautions. “Give the house, the land or the business to just one child and make up the difference with a monetary share for the others. Alternatively, stipulate that the asset be sold and the proceeds divided evenly. That way, the one who really wants the asset can buy the others out.”
For additional tips for dividing assets and estates between siblings, from AARP, CLICK HERE.