Family Inheritance: avoiding conflict

Involve your beneficiaries in your inheritance planning to prevent any misunderstandings or feelings of envy.

27 Jul 2021
For example, who gets the jewelry? And what about your securities and the vacation home? Discuss your inheritance planning openly.

We’ve all seen it in movies: no sooner has a couple died than their children immediately start arguing over who gets what. Unfortunately, this scenario is also common in real life. For example, who gets the jewelry? And what about the vacation home? Unless you plan your inheritance early on, this fictional plotline can quickly become reality. The following three key elements need to be taken into account, specifically:

  • Defining what’s “fair” when allocating your estate.
  • When it makes sense to involve a third party.
  • Why it is worth drawing up a will.

We will address these points in the following sections.

Everyone interprets the word “fairness” differently

As you get older, you will start thinking about what will happen to your assets when you die. Naturally, most people want the inheritance process to be as simple and transparent as possible, and for everyone to be treated equally.

    However, actually doing so is often more difficult than you might think, because the parent’s view of what is fair can often differ from that of the heirs.

      The most challenging aspect of inheritance planning is developing a common understanding of the wishes of everyone involved. While older generations care about fair allocation in material terms, younger generations attach more emotional value to things, such as the holiday home where they spent many happy summers as children. Families who discuss inheritance planning and their personal needs openly are more likely to avoid disagreements and find solutions that suit everyone involved.

      Get clarity by involving a third person

      If disagreements or accusations persist, or if the inheritance is particularly complex, it is a good idea to invite an impartial third party to be present at a meeting with the whole family. The heirs can then be involved as you seek to understand each other’s wishes and needs, allowing for a more objective discussion.

      Particular attention should be paid to ensuring that the various assets are distributed fairly. For example, dividing a house and a vacation apartment among three heirs can quickly lead to disagreement, not to mention difficulties in the financial settlement. You can also read our article “How to distribute real estate fairly”. The same applies to other assets such as jewelry or art.

      Be sure not to forget about assets you need while you are still living. For instance, will the income from your pension and investment returns be enough? How much money will you need in the years to come? Consult an external advisor well versed in finance. Financial planning can help you answer these questions and is a good basis for the discussion with your family. You can also read our article “Wealth planning: do you have a plan?”.

      Be prepared with a clear, written will or contract of succession

      Stipulate who receives which assets in a will or contract of succession. The main difference between the two is that a contract of succession is mutually binding for the testator and the other contractual partners. A will, on the other hand, is a unilateral, revocable statement of the testator’s intent for their estate and must comply with formal legal requirements.

      A contract of succession is suitable, for example, for couples who want their partner as their sole heir, and whose children are willing to renounce their statutory share when one parent dies. Another common scenario is arranging who will inherit a company.

      When entering into a contract of succession, bear in mind that:

      • The document must be legally authenticated, for example by a notary.
      • All parties must be of legal age.
      • You must seek the consent of all those involved before amending or annulling the contract.

      You can find out more about contracts of succession in our article “When is a contract of succession a good idea?”.

      A will gives you freedom to decide how your assets will be passed on to your beneficiaries, without prejudice to the statutory shares of those with an inheritance in law. A will allows you, for example, to state that a property you wish to pass on is worth less than the market value or that your children’s education costs should also be considered.

      You can also include non-family members in your will, provided this does not infringe the statutory shares of your relatives. If you do not have legal heirs, you can leave all your assets to a person or an institution.

      There are a few points you must bear in mind when writing a will. A will must be:

      • written by hand;
      • dated with the day, month and year;
      • physically signed with your first and last names.

      You can also indicate any advancements in your will and their exact value.
      Find out more about wills in our article “Transmission of assets: make plans early on”.

      Fairness check: When do you need to take concrete steps to ensure your assets are distributed fairly?

      • If your family situation changes due to death or divorce.
      • If you have a legally complex family situation, e.g., a patchwork family, cohabitation or registered (same-sex) partnership.
      • If advance inheritances or calculation of their value have been / should be made.
      • If ownership of assets is unclear or is split between several parties.
      • If it turns out that inheriting parties are unaware of certain assets.

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