The Hatfields and the McCoys, the Israelis and the Palestinians, the House of Lancaster and the House of York.
When it comes to conflicts, those listed often have nothing on the old sibling verses sibling feud when it comes to an inheritance.
I hear these stories from time to time, as being part of a collective of financial advisers across the country means shared support, technical knowledge and industry experience.
That collective experience underlines the various pitfalls others have encountered, which means ensuring we help people avoid similar pitfalls.
An interstate colleague had a recent visit from a potential client we’ll call David who was happy to share his story.
David’s mother had passed a while back and the family home had been left to David and his two sisters.
The elder sister, who we’ll call Rhonda, wanted to live in the house and suggested she and her husband could move in, all three siblings would stay on the title and she’d take care of bills and maintenance.
Rhonda said their wealth would grow collectively and everyone would be a winner.
David and his sister Sandra, who were much younger, thought this was a decent idea and went along with it.
A decade later, which included some juicy capital gains, David thought he’d like a taste of his equity – now a few hundred thousand dollars.
But how do you think Rhonda regards the house her family has been living in mortgage free for ten years?
Rhonda told David she wasn’t selling and she certainly wasn’t taking on huge mortgage to pay him out.
Unfortunately, there was no co-ownership agreement drawn up because David and Sandra assumed families can work out all legal and financial issues with a smile.
Regardless, this was no longer a financial issue – just a legal one and there’s little possibility of it ending amicably or cheaply.
When it comes to matters like this, spending a little money early on advice and legal agreements means saving a lot on costly legal and emotional wars further down the road.
Peter Mancell is a director of Mancell Financial Group and FYG Planners AFSL/ACL 224543, www.mfg.com.au This information is general in nature and readers should seek professional advice specific to their circumstances. Looking for highly rated financial advisers in Australia to reach your goals?
