Catherine Randall is an 80-year-old widow who owns her own home in a good neighbourhood and has savings of about $250,000. Mrs. Randall has two children, Michael and Elizabeth, both in their forties.
Michael is a happily married and successful businessman who earns a six-figure salary. He has a large home and cottage and three children who all attend private school. Mrs. Randall is, understandably, very proud of her son.
Elizabeth has been less successful financially. She has tried many careers but never stayed with one for long. Elizabeth lives in a rental apartment and is often short of cash, particularly during the frequent periods when she is between jobs.
In order to ensure Elizabeth’s long-term financial security, Mrs. Randall intends to leave her home and most of her savings to Elizabeth on her death.
Mrs. Randall did not intend to tell Michael of her plans before her death. She believed that he would know that her decision to leave the bulk of her estate to his sister was because she respected his ability to support himself, and reflected her pride in him.
She was surprised when her financial advisor suggested that Michael might see her estate plan as the exact opposite, and think that she was disappointed in him for reasons unknown, so had disinherited him.
Mrs. Randall’s advisor also cautioned her that since her children would learn of her wishes at the same time they were coping with her loss, their emotional reactions might be exacerbated.
Mrs. Randall’s financial advisor recommended that she hold a professionally-mediated family conference to explain the reasons for her estate plan to both children. Although Michael was initially surprised by her proposed plan, after some thought he agreed that it was fair.
Michael told his mother that there were two gifts he would like from her estate: his father’s stamp collection, which had strong emotional significance to him, and some funds to help pay for his children’s upcoming university education. His mother had been unaware of his desire for the stamp collection, and intended to sell it and add the proceeds of the sale to her estate. When she learned of his wishes, she arranged to leave the collection to him. She also set up a trust fund with $50,000 of her savings for her three grandchildren’s university education costs.
In the end, both Mrs. Randall and her children were pleased with the results of the conference. Mrs. Randall was particularly pleased that her decision to leave the bulk of her estate to Elizabeth did not seem to be causing animosity between the children. Michael was relieved that his mother’s decisions meant that he would not be expected to support his sister financially after his mother was gone, and he was pleased that his mother had recognized his children. Elizabeth was, naturally, happy to have her long-term financial worries alleviated.