Even the most tight-knit family can come to blows if there is a dispute over money. Family conflict surrounding financial matters is common-place, and there are no set rules or guidelines when it comes to managing finances with your siblings. If you are much better off than another sibling, they might see you as an interest-free bank. If you become executor of your parent’s estate, you may have to deal with siblings who don’t believe their inheritance was fair. We have provided you with an outline of what to consider if you find yourself involved in these two scenarios.
Giving out Loans
What do you do if one of your siblings comes to you looking for a loan? It’s hard to say no to a loved one during their time of need, but you need to consider what the money is going to be used for. You don’t want to enable a sibling if you know that they are troubled. Not to mention that in this situation you aren’t likely to get your money back. If your sibling is looking for help to send your niece or nephew to post-secondary school, you would be helping them immensely and you are likely to get your money paid back. Even though it is family, it is recommended that you put the loan and the repayment terms in writing. This helps legitimize the lending and help protect your relationship. Just remember that you should only lend money if you can afford to go without it if it’s left unpaid.
Dealing with Inheritances
It’s common practice to name one child as executor of an estate, but that can lead to problems if there are other siblings involved. The children left out may feel that all of the siblings should be involved in the decision-making, which can cause some conflict. The inheritance can cause a lot of friction, even if the assets were split evenly. It all depends on the situation and the people involved. These types of conflicts usually involve expenses and delays. When writing a will for a family with siblings, it’s best to anticipate your family’s unique situation and the personalities involved.
When dealing with financial matters within a family, communication is key. Talking and gaining an understanding of each sibling’s needs and wants can help prevent potentially disastrous family conflicts. For help with such matters, you should contact a financial advisor at The Beacon Group of Assante Financial Management, Ltd.