Claire was the middle child in her family, but even at a young age others could see that she would be the leader. She always seemed to be in charge and could make things happen.
Claire had a wonderful childhood growing up on a farm with her two sisters.
In time, the girls grew up, and each married. Claire had always enjoyed working with her father and seemed to naturally gravitate to the family business. Her younger sister married a man who was handicapped and dedicated a large portion of her life to caring for her husband.
Claire’s older sister married a farmer, but they did not enjoy much success and her family found themselves in constant financial trouble.
Claire and her husband gradually took over more and more of the farming operation and a side business which her father had started. They found a niche selling chemicals and custom-spraying.
Her father had done some estate planning, so when he died unexpectedly, the farmland and the chemical business both ended up in a trust with the mother as the beneficiary. The trust named his wife and Claire as trustees.
Things went along fine for the next 25 years. The chemical and spraying business continued to grow, providing employment for Claire and giving her mother more than sufficient income to live on.
As the mother grew older, she thought it was time to transfer some things to Claire. The chemical and spraying business were purchased from the trust by Claire and her husband. They continued to run the business, and it was profitable.
Being fully retired, Claire’s mother decided to sell some of the farmland in the trust to Claire. Claire was concerned about how this would look to her sisters, but her mother set the sales price, and Claire wrote the check.
Everything seemed fine until the mother died. After the funeral, Claire’s sisters accused her of stealing things from their mom’s trust. She was shocked by their accusations.
Claire’s sisters had an entirely different view of what had happened over the last 30 years. They believed Claire had always been their father’s favorite. She was bossy and manipulative. They had watched Claire over the years work together with their father and mother and influence their decisions.
After their father’s death, Claire became their mother’s favorite also. She was able to wiggle the spraying business out of their mother’s control and benefited unfairly throughout her life from the stream of income they credited to their father. They were angered when they saw Claire purchase farmland at a discounted price.
In each of these things, Claire got an unfair advantage over them and they felt disconnected from their parents.
Now their mother was dead, and it was time for the scales to be rebalanced after many years of injustice. Claire was quite surprised when her sisters approached her and asked for a cash settlement to right the wrongs of the past.
She rehashed to them that she and her husband had dedicated a large portion of their lives to running the spraying business and their farming operation. The success they enjoyed was not simply a gift from their father and mother but the result of a lifetime of hard work. Her sisters did not agree with her perspective.
In time, Claire was served papers, and everyone went to court. The waters of family business succession were very muddy from the very beginning. There were many questions to discuss.
What was their father thinking all those years ago? What did their mother really want to do with the assets she inherited from her husband? Had Claire taken advantage of both her father and mother? Was Claire the good daughter or was Claire the bad sister?
Could the court system be as wise as Solomon in discerning the thoughts and intents of the last 30 years?
Readers may look at Claire’s situation and believe there is no possible resolution, but this is not true. When people cannot agree, we have a system of laws and courts to settle the disagreement. At the end of this process everyone may go away unhappy but the dispute will have been resolved.
Situations like Claire’s seem to breed contention. It may seem unnecessary for a parent to explain their reasoning for every asset purchase or business decision they make during their life. It would seem highly destructive for a parent to explain why one child receives more than another.
What if Claire really was the good daughter? What if her mother benefited greatly from Claire’s hard work and good business decisions?
In retrospect, Claire’s father could have provided a better estate plan, which included an exit strategy for his wife along with the assets. Seldom do people look that far into the future and have the ability to anticipate possible events.
In defense of Claire’s father, he died young and was fortunate to have done any planning at all. It worked well throughout his wife’s lifetime, and perhaps there was nothing more he could have done.
If a parent is of a sound mind, can a child be justified when disagreeing with their decisions? A child who spends years farming with a parent may find themselves in the awkward position of explaining their parents’ decisions to their siblings.
Regardless of good intentions, Claire’s extended family will never have Thanksgiving or Christmas together again. The good feelings and heritage they could have passed on to their descendants is now gone. It has been replaced with children licking the wounds of a lifetime which will not heal.
Bob Dunaway and Associates offer estate and retirement planning. Gary Johnson can be reached at 563-927-4554 or by emailing him at email@example.com.