This year’s celebration of Dr. Martin Luther King Jr.’s birthday is marred by the ugly headlines surrounding his family’s lawsuits against one another. King’s name is synonymous with grace under pressure, a wish for a peaceful resolution of differences, and strength of character. His heirs’ behaviors must be causing King to roll over in his grave.
King’s sons, Dexter and Martin III, are engaged in a lawsuit against their sister, Bernice. While few know the specifics of the family finances and the estate, Bernice contends that her two brothers are attempting to sell that which they do not own, namely King’s personal Bible and his Nobel Peace Prize medal. According to CNN, the historical relics are worth somewhere between $20 million and $40 million, and, in an indication of just how vicious the squabble has become, the Bible and medal are now housed in a safe deposit box for which only a judge has the key. Worse, this isn’t the first time the family has been in court; in 2008 the siblings filed three lawsuits between them in only 90 days’ time, and just last year the estate sued the King Center, where Bernice is CEO, charging that the Center “wasn’t caring for King artifacts properly” according to the AP.
Almost all of us have at one time or another seen successful families develop disagreements, frustrations, and even feuds over the settlement of Mom’s and Dad’s estates. We look at those situations aghast saying how unseemly, how ungrateful, and how unreasonable the greedy children are! And we wonder how a family and business owner can get themselves into such a mess. Here are a few tips for making sure that your heirs don’t feud and besmirch your family’s legacy after you’re gone.
- Recognize that estate planning is a process in need of ongoing evaluation and periodic changes. Times change, people change, circumstances change, and values change. We recommend that estates get a thorough review about every three years.
- Make family, not unilateral, decisions. Talk about the plan. Get it on the table. Discuss everyone’s wishes and expectations. If you find that one party’s philosophy with respect to the family business or other family assets is at odds with another, the time to tackle those disagreements is now rather than waiting until after you’re gone and no one’s around to help referee the disagreements.
- Once the plan is made, don’t keep it a mysterious secret. Communicate with everyone what the plan is and what your wishes are. And don’t forget the grandchildren; children don’t stay young very long. Plans that were initiated when they were babies should be modified with ramifications for them as adults. Treat the younger generation as adults and bring them into the conversations at some level.
- Transfer what makes sense for individuals recognizing that equal isn’t always fair. The age-old discussion among families and family businesses says either one thing or another. Some advisers say that the family operating company should only go to the people who work in the business and other assets should go to non-employee heirs. Others say, just as vehemently, that all heirs ought to be treated equally at inheritance time. As a family business adviser, it really doesn’t matter what the family wishes; there are tools available to accommodate families of either philosophy. It is important, however, to take into account passing assets to people for whom the assets makes sense. For example, if you have a gun collection and one of your heirs shares your enthusiasm for firearms while the others think firearms are archaic and dangerous, it doesn’t necessarily make sense to split the collection down the middle.
And what happens if the estate planning doesn’t work as intended by Mom and Dad? Here are some guidelines for getting sibling disputes resolved in a constructive way.
- Retrace the family line back to the source. Remind the parties of the intentions of the benefactor, his philosophies, his worldview, and his wishes for his heirs.
- Resolve the conflicts using tried-and-true techniques. Conflict resolution techniques are many; instead of recounting them here, download our white paper on the subject.
- Refocus all parties on what’s really at stake. Focus everyones’ minds on the big picture. Is the feud about a few dollars or is there more at stake? Isn’t the raw material of family, common heritage, common bonds, and core values more important than whether one party has a few more dollars than the other?
- Establish and maintain momentum. Just as in a college basketball game, momentum is important. Start with small agreements first; simply getting the parties to agree on anything might be a tall order in the beginning. But once small agreements are made, momentum can build leading to agreement and consensus on increasingly bigger issues.
- Begin with the end in mind. This timeless advice from Stephen Covey is most effective. Attempt to get the parties to arrive at a constructive, win-win vision for how they might end up. Then the task becomes not defining an endgame, but simply building a bridge to the endgame.
Whether it’s Dr. Martin Luther King Jr., or any other notable person or family, no one wins when family disputes over assets or money become public. With respect to all our readers in the legal community, it must also be fairly said that once the sides choose up, hire lawyers, and answer the machinations of the legal system, the odds of family restoration are practically nil.
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