As of this writing, the year is about to end and to be replaced with a new one. Suddenly a thought occurred. What if it is life that is to end? For sure there is no replacement.
Remember the American game show titled “The Family Feud”? This popular game was created by Mark Goodson. In this game, two family teams of five contestants each compete to win cash and prizes. Each round begins with a “face-off” question that serves as a toss-up between two opposing contestants.
The first to give the most popular answer immediately wins the face-off. Otherwise, the opponent responds and the family member providing the higher-ranked answer wins. The family that wins the face-off may choose to play the question or pass control to their opponents.
The family with control of the question then tries to win the round by guessing all of the remaining concealed answers, with each member giving one answer in sequence. Giving an answer not on the board earns one strike. If the family earns three strikes, their opponents are given one chance to “steal” the points for the round by guessing any remaining concealed answer; failing to do so awards the points back to the family that originally had control.
What will be the scenario if the family feud is not a game by two families but an internal feud within the family of five resulting from a spouse’s life that suddenly ended? For sure, it will not be the same result as that of a game show.
Consider this scenario. A husband is critically ill and knows that his demise is sure to come within five months. He has assets that are under his name and he has a wife and children who will survive him. He reminded his children to love one another and support each other.
But for unknown reason, he entrusted all his assets to one of his sons who is living abroad while letting his wife and other children take care of him until his death without leaving an amount to cover all expenses they incurred for him. As expected, the son entrusted with the assets succumbed to greed and made a “steal” to own all the assets, leaving the surviving spouse and siblings with none.
The greedy son did not even make an effort to monetarily compensate his siblings for all the time and personal money they spent for their father. When the surviving spouse asked for some monetary support, he would even offer different reasons for not sending back the money when the fact is that the surviving spouse has a right to it.
Such is the power of greed. As the saying goes, “As blood is thicker than water, money is thicker than blood”.
In the USA, estate laws differ from state to state. When an individual dies intestate (meaning no will or trust to bequeath assets), state law determines how the assets are to be divided among the heirs. Only a third of all states have laws specifying that assets owned by the deceased are automatically inherited by the surviving spouse. In my honest opinion, this makes sense because the spouse is the lifetime partner of the deceased and she is the co-owner of their assets.
Under Philippine law on Intestate succession, only compulsory heirs of the deceased are entitled to inherit from his or her estate. And under the Civil Code of the Philippines, compulsory heirs include the surviving spouse and the children, whether legitimate or illegitimate.
Assuming the surviving spouse is a housewife and has no income, following the Philippine law would leave her at the risk of outliving her share of the estate. Another risk is that the children will be subject to laziness specially if the amount they will receive is great. It must be noted that international superstar Jackie Chan does not plan to leave his estimated $370 million fortune to his son, Jaycee. Chan explained that “If he is capable, he can make his own money.”
In the scenario above, a prospective heir who has “more authority” oftentimes forcefully gets the lion’s share. Usually this kind of set-up lead to siblings fighting each other for the heirloom. Oftentimes, this leads to court battle. Had the deceased planned well before his death, costly family feud would have been avoided.
As parents, we can rectify this kind of error early in life. Here are some guidelines:
1. Talk to the family about death and its impact. As morbid as it may seem, there is a need to discuss about this reality so that everybody will be in agreement about heirloom and there will be no bad blood between siblings later.
2. Educate the family about money matters. By teaching the children on the purpose of money, greed will be put at a minimum. When people do not put a goal on the money they saved, they will only be accumulating money to no end and their only purpose is to have more and more money without contentment.
3. Involve members of the family for every major money decision. Whenever there is a major issue about money, make it a point to have a family meeting to discuss it so that this can be a money lesson for every member, The more they are educated, the lesser the greed will be.
4. Be insured. Insurance is the best tool to manage risk and conflict. By being properly insured, one can assign a certain amount to be given to every member of the family without the need for the siblings to quarrel among each other because at the time of purchase, everyone is involved. Buying insurance is a major money decision.
Always remember, if you love your family, it pays to plan ahead. Give time to study about estate succession and planning.
Edmund Lao is a registered financial planner of RFP Philippines. To learn more about personal-financial planning, attend the 87th RFP program this January 2021. To inquire, e-mail info@rfp.ph or text at 0917-6248110.