Why you should avoid fighting with family about money

But financial abuse often occurs the other way around.

In one high-profile Victorian case, a mother and father who were, along with their three children, the beneficiaries of a family financial trust, had given away all the money from the trust to themselves and to one, favoured child. They gave nothing to the other two children.

“I think it was just a lack of, you know, necessarily a good relationship with the other two, versus the one [child],” says Wilson, who wasn’t involved in the case.

What has Wilson gleaned about families, after 20 years of working in this area?

“Three [children] seems to be a pretty bad number [of kids], as far as these disputes are concerned,” she says, with a chuckle. (Wilson has three children herself.)

For many people in the process of giving money to family members, whether that’s because they, like Beyonce’s father and Houston’s father, work for you, or you’re considering what you’ll gift to them after you die, that ship has already sailed.

So, what can people do, to try and avoid a financial and emotional fallout in their family?

“Well, I can tell you, you need to keep track of it [loans and gifts to children during your lifetime], and be clear,” says Linda Rosenman, emeritus professor of social work at The University of Queensland, who has researched will contestations from across Australia.

Adult children often contest the wills of their parents, after they’ve died, if the parents had given money to that child’s siblings during their lifetime, says Rosenman.

“Parents help kids with buying a house, so one child doesn’t really need the money because they’re living in Orange [in rural NSW], but the other child needs money to buy a house in Sydney because there’s no other way they can afford it,” says Rosenman. “So you give that child a million dollars, and the child in Orange a thousand dollars. And then, how do you take that into account [after the parents die?]” One child often argues the money was a gift; the other says it was a loan, that needs to be taken out of their share of the estate, once the parents die.

Hiring a professional facilitator who can help your family to civilly and productively communicate their wants and needs can be enormously helpful, says Wilson. “They often have qualifications in psychology or neuroscience.”

The alternative is often costly court cases or verbal abuse in mediation rooms that lead to permanent rifts.

“There will be a lot of crossed arms [in mediation rooms]; yelling around, ‘That’s just BS’, that type of thing,” says Wilson, of what she sees when family members attack each other in mediation rooms. “That’s what we see, particularly when people are grieving, or there’s financial stress. Long-held resentments over things suddenly boil to the surface.”

Another tip? Take a good hard look at what your family members are actually like, as opposed to what you wish they were like.

“[Often], parents will appoint everybody” – all their children as executors of their will, or having power of attorney – “to keep them happy, when they actually don’t get along with each other,” says Wilson. “[Because] they want them [the kids] to still think well of them.”

So siblings often end up hiring their own lawyers, to battle each other, which inevitably ends up taking significant amounts of money off the estate they’re both due to inherit.

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“[I also say] to parents, ‘You might think your children get along, but do they all get along with each other’s spouses?’ Because spouses will influence one [adult] child to bring an action against another.”

To ward this off, people need to get legal documents drawn up that establish which children have been given money, during the parent’s lifetime, and why, and whether this was a gift or a loan, that is then subsequently taken out of that child’s share of the eventual estate. (This would have likely saved Whitney Houston from suing her step-mother for a house that Houston argued was hers.)

Or, consider distributing your assets to your dependents while you’re still alive. “If it’s already been transferred it’s much more difficult to fight over it later,” says Wilson.

And anybody in business with family members need to run their business, well, like a business.

“Treat them [family members who are staff] like you would another employee and make sure that everything’s documented appropriately, and they’re paid market wages,” says Wilson.

And, says Rosenman, don’t think that a modest estate renders you immune to fall-outs.

“It didn’t seem to matter how big the estate was, if they were going to fight it out, they were going to fight,” says Rosenman, of the research she did into will contestations. “There were a couple of cases where the cost of contesting a will meant there was almost nothing left [to inherit].”

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