Navigate sensitive conversations with our six tips for discussing inheritance with your siblings.
Inheritance discussions with siblings can be challenging but addressing them early can save your family stress and misunderstandings down the line. Here’s how to approach this sensitive topic constructively and keep the conversation focused and respectful.
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1. Keep It Calm and Respectful
Start the conversation with a calm, neutral tone. Inheritance discussions can bring up old rivalries, misunderstandings, or even buried family grievances. To avoid unnecessary tension, reach out to your siblings thoughtfully. Frame the conversation as an opportunity to understand each other’s feelings and avoid misunderstandings later on.
For the best outcomes, find a comfortable, private setting where everyone can talk without distractions. Recognize that each sibling’s perspective is unique and remind everyone that the goal is to foster understanding, not create division. If everyone’s respectful and open-minded, the conversation is more likely to be productive.
2. Understand the Basics: Key Terms in Inheritance
Before diving into specifics, familiarize yourself with some basic estate planning concepts. Here are a few terms that often come up in inheritance discussions:
- Executor: The executor is the person appointed in a will to manage the deceased’s estate. This person is responsible for ensuring that the will’s terms are carried out, from paying off any debts to distributing assets to the beneficiaries. Executors have a big responsibility, so it’s essential to choose someone who is trustworthy and organized.
- Estate Planning: Estate planning involves preparing for the distribution of assets after someone passes away. It covers everything from drafting a will to setting up trusts and can even include decisions about guardianship for dependents.
- Trusts: A trust is a legal arrangement where one person, called the trustee, holds assets on behalf of someone else (the beneficiary). Trusts can help manage assets in complex family situations, like when a beneficiary is a minor or has special needs.
Understanding these terms helps ensure you’re all on the same page and can make clearer, better-informed decisions together.
3. Consider Bringing in a Neutral Third Party
Sometimes, an inheritance conversation can benefit from the presence of a neutral third party, such as a financial advisor, estate planner, or even a family mediator. This person can offer unbiased, objective advice and answer questions that family members might struggle to navigate on their own. For example, an advisor can clarify how assets might be taxed or suggest options for dividing property fairly among siblings.
A professional presence can also help keep emotions in check and ensure that the discussion remains solution-focused. If there are any specific legal or tax considerations tied to the inheritance, a third party can help break down the details for everyone, making the process easier to understand and ultimately more agreeable.
4. Discuss What Each Person Values Most
Inheritance conversations often run into conflict because different family members may value things differently. For example, some may prioritize financial assets, while others care deeply about sentimental items like family heirlooms, jewellery, or the family home.
Encourage each sibling to share what they value most, whether it’s keeping a specific property in the family or dividing financial assets in a certain way. If one sibling has a strong emotional attachment to an item, perhaps they could purchase it from the others, or everyone could agree to share it. Having these open, respectful conversations about values can help everyone understand each other’s priorities and reduce the risk of future disputes.
5. Put Agreements in Writing
Once everyone has agreed on the basics, it’s a good idea to document your discussions. Although this document may not be legally binding, it can serve as a helpful reference for future discussions and reduce misunderstandings. For instance, if one sibling has agreed to take on executor duties or specific family assets are allocated to particular people, writing it down makes it easier to recall these decisions later.
Encourage your parents to make their wishes official by drafting a formal will if they haven’t already. A well-documented estate plan or will clarifies how they’d like their assets to be divided and reduces confusion among siblings. It also ensures that everyone’s preferences and decisions are honoured.
6. Make It an Ongoing Conversation
Inheritance discussions aren’t one-time events. Circumstances change—whether that’s due to family dynamics, financial needs, or the health of aging parents. Revisit the conversation every few years or whenever significant changes occur. For instance, if a sibling’s financial situation changes, or if an asset increases significantly in value, it might be worth readdressing the plan.
Keeping the conversation open and revisiting it regularly helps maintain a foundation of trust and ensures that everyone remains on the same page. Acknowledge that feelings may change over time, and creating a culture of openness will make future conversations easier.
Talking about inheritance may feel uncomfortable, but honest conversations now can help avoid disputes and misunderstandings later. Remember, this isn’t just about dividing assets—it’s about respecting family values, protecting relationships, and honouring everyone’s needs. Now is also the perfect chance to ask How Does Your Super Fund Stack Up? And learn if you should get insurance through your superannuation fund here.
