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    A Promise, a Family-Owned Business, and a Will Contest.

    When a promise leads to a will contest, no one wins. That may seem obvious to us, here, now, from a remove, yet it happens over and over again.

    cartoon0415We have a friend who did some pretty involved business planning for a family owned business in the Northeast about five years ago. It was somewhat complicated – two sisters were the owners, husbands, children, grandchildren all worked in different capacities. What took it from somewhat complicated to outright stressful, however, was the incredible animosity between the sisters. Some would say hate. Their offices were as far apart as they could possibly be, they both issued orders to the employees, usually they countermanded each others’ latest decision.

    The rest of the family had adapted to the dysfunction, made jokes about it, dealt with it as easily as possible by ‘translating’ the sisters’ orders to the employees. In reality, that means they compromised on nearly everything. But, the company was very successful, sales were through the roof.

    Each sister wanted their half of the company to be taken over by their children – the ones that worked in the business, One problem was that one sister had three children, the other one working with them. Another was that the sister with the one child was extremely close to the oldest child of the other sister, her niece.

    This sister was extremely ill a year before our friend started planning. Her niece spent weeks by her bedside. Literally. The sister said loudly and often that her niece ‘was like a daughter to’ her. On death’s door she promised her niece she would give her a share of her ownership. Recovered, she promised her niece she would give her a share of her ownership. Back at work, finally, she told everyone she was giving the niece a share of her ownership.

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    Nobody objected, The niece, in fact, became a sort of conduit to the sister, making it a bit easier for everyone else to deal with her, removing her mother from having to interact with her sibling, always a good thing. Because of this added responsibility, the scope of the niece’s duties increased almost daily.

    The niece then, you could probably see this coming, started working longer hours, doing special jobs. When she balked at working weekends, she was reminded that she was getting a chunk of her aunt’s shares. Everyone – everyone – there heard the promises, they were, in fact, impossible to miss.

    This was still going on when our friend finished his work with the company. He urged the sisters to hire estate lawyers, he urged the sister to draw up a contract with the niece. Of course, none of that happened – if it had, we wouldn’t be writing about it.

    The sister died, her half of the company goes to her daughter. The niece received nothing. The niece is suing. At least half the people that heard the daily promises are the ones who directly benefit if the niece is unsuccessful. It is a mess.

     

    If any of this seems too familiar to you, give us a call, let’s talk about it.

    About the author

    Erik J. Broel
    Founder & ceo

    Erik founded the firm in 2009. He sees it as his personal mission to demystify the process of handling an estate or trust, and to help people by making the complex estate process simple and accessible. He believes there is always a better way to do things, and loves finding new and innovative ways to deliver better, more effective service that solves the client’s key problem or issue, and improves the client’s life.

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