If you're writing a will, what will help your family the most (aside from the money, of course)?
Leaving them at peace, rather than riven by the way you divided the property.
Your children have issues you don't know about, and that they barely understand themselves. Their rivalries go back to childhood: resentments over family position, closeness to parents, "good child" and "bad child." Fights over property--even little things, like a rug or a toaster--reflect fights for dominance.
The AARP Investment Program from Scudder recently surveyed Americans 50 years and older. One in five said that an inheritance--or lack of one--caused hard feelings among family members.
Rivalry was the lowest among people 70 and up. However, among the oldest baby boomers (age 50 to 53), fully one-third reported discord. They're still young enough, or needy enough, to want to fight.
Most of the fights involved money. But 47 percent of families warred over jewelry or other heirlooms, 43 percent about a house, 31 percent about other real estate and 11 percent about investments.
Tensions generally arose because some family members thought the division of property wasn't fair. Nearly half suspected that unfair pressure was brought on the parent, to tip the inheritance toward or away from one of the heirs.
The best approach is to tell your children, now, how the money will be divided and why. Of the families that reported "no conflict" to the AARP, 63 percent said they knew what to expect in advance, and 82 percent said they thought the division was fair.
Even unequal division of property can be perceived as fair if all the children agree.
"It's also important that all the children get at least some money, even if it's less than the others get," says Michael Chasnoff of Advanced Capital Strategies in Cincinnati.
You might minimize friction by dividing the heirlooms equally, or give more of them to the children who will otherwise inherit less.
Heirlooms matter a lot, including those of purely sentimental value. Families can fall out as much over little things as big ones.
Wise parents talk with their children over months or years about which heirloom each wants most. Gradually, they let everyone know what "belongs" to whom. That doesn't always guarantee peace, but it helps a lot.
Parents should be especially clear in families where there's a second spouse and stepchildren. The "first-family" children usually worry that the second spouse will cut them out--especially if that spouse remarries after you die.
So think about leaving those children some money in trust. Typically, the spouse gets income from the trust; the children get the principal, when the spouse dies.
Think twice--no, thrice--before leaving two or more children a share of a vacation home. Inevitably, they won't agree on how to manage the property. Does the living room need new furniture? Should they add a porch? Is it too expensive to fix the driveway?
One child may be bossy, one child may not have the money for upkeep, one child may live too far away to use the house, and want it sold.
Think about selling a vacation house or condo that you're not using much anymore. If the house will be left to the kids, suggest one of two things: that one child choose it as his or her share of the estate (if there's enough to go around), or that it be sold after your death, and the proceeds divided.
The same kinds of issues come up with the family home, especially if one child is living there, taking care of you. If the home is the principal asset, everyone might agree that the child in residence should inherit an extra share of the proceeds of the sale to help him or her buy something else.
Where there's a substantial inheritance, think about parceling it out, says financial planner Janet Briaud of Bryan, Tex.
People often make money mistakes when they're in their 20s and 30s, she says. They tend to treat it more carefully in their 40s and 50s.
She suggests leaving an inheritance in trust, to be dispensed in three chunks: one-third at, say, 30; half of the remainder at 40; and everything else at 45 or 50.
Chasnoff suggests that you leave each of your children a letter. "Talk about your own values, and what you admire about that particular child," he says. A letter that makes a child feel loved is perhaps the finest legacy you can leave.