February 24, 2012 / 6:30 PM / 7 years ago

YOUR MONEY: Suing descendants, in real life

By Mitch Lipka	
    NEW YORK, Feb 24 (Reuters) - Real life can be a lot
harsher than movies suggest, when it comes to descendants and
money. 	
    "The Descendants" movie, which awaits possible honors at the
Academy Awards on Sunday, portrays a family conflict over
inherited real estate, but has nothing on the dramatic battles
that often play out between heirs in real-life courtrooms around
the world.	
    Take the family feud behind Samsung Electronics
Co. The company's chairman was sued in South Korea by
his brother, in a dispute over shares in the company that their
father started. Lee Maeng-Hee, 80 is suing Lee Kun-Hee,78,
seeking $623 million and accusing his younger brother of keeping
the family wealth for himself.	
    So, family inheritance squabbles aren't limited to the
young, and they may not be triggered immediately following a
wealthy parent's demise. Lee Byung-chull, Samsung Electric's
founder and the counterparties' father, died in 1987.	
    Whatever their intricacies, intra-family lawsuits may be on
the rise. As Baby Boomers continue to move into their later
years, a massive transfer of wealth is expected to take place.
Even when the stakes aren't so high -- as when a family's
business or holdings are at stake and heirs aren't in agreement
 -- litigation is sure to follow.	
	
    EXTENDED BATTLES	
    Time doesn't always heal all wounds. 	
    A battle between the heirs of Hawaiian banker Samuel M.
Damon, is still raging, even though Damon died in 1924. One
issue was eventually settled in 1994 by the Hawaii Supreme
Court. 	
    After the demise of the last of his grandchildren, Joan
Damon Haig, eight years ago, nearly $1 billion in stock and real
estate was liquidated and divided among the heirs. Two of them
continue to dispute how the money was handled after the
liquidation, and whether they received proper disclosure.	
    Few family financial feuds can rival that of the Pritzkers -
the family that owns the Hyatt hotel chain. 	
    The original plan was to keep the family wealth together,
but that fell apart in the years following the death of Hyatt
co-founder Jay Pritzker in 1999. 	
    In 2002, Liesel Pritzker, then 19, sued her father and 11
older cousins for $6 billion. She alleged that they had cheated
her and her brother out of their trust funds in a plan that
divided the family fortune (estimated then at $15 billion) and
called for it to be paid out over a decade.	
    Although the case was settled in 2005 for a reported $450
million each to Liesel and her brother, the process of sharing
the wealth among the cousins just ended in December. The 2011
Forbes list of wealthiest Americans has 11 Pritzkers listed as
billionaires. 	
    Probate and trust attorney Michael Dribin, with Harper Meyer
in Miami, says he witnesses such acrimony time and again, with a
common thread -- poor planning and a lack of dialogue before a
senior family member dies. 	
    	
    SIBLING ENVY	
    When one child is given more than others or is ceded more
control -- or when some are involved in the family business and
some aren't -- the rifts can widen fairly quickly. Lawyers are
then brought in and civility can disappear fast. 	
    "They can quickly devolve into expensive and emotional
proceedings," Dribin says.	
    Knowing this, why don't the aging parents make provisions
for potential disputes? 	
    Some do. Some think they have, and add provisions to a will
that sometimes further complicate matters. Others, Dribin says,
simply don't want to deal with the drama and the idea of death.	
    "Some of these business owners -- they've been very
successful  and they don't want to confront their own
mortality," he says. "Some of them don't want to confront
problems," including conflicts among their children.	
    Money and death magnify the normal conflicts of any family,
says Allan Cutrow, chair of the Trusts and Estates group at
Mitchell Silberberg & Knupp in Los Angeles. 	
    "Every perceived slight that was visited upon one child or
the other seems to be an opportunity to get involved in
litigation."	
    The challenge is to encourage heirs to separate the
emotional issues they want to air, from the monetary issues they
are in conflict over, he said.	
    "The more healthy and mature the relationship between the
parties, the greater the likelihood they'll work through their
issues," Cutrow said. "There's always a little jealousy. In
healthy families, everybody takes a breath and maybe there's a
compromise here or compromise there and everyone gets through
it."	
    Of course, that's not always the case, and fighting among
siblings, cousins and other relations can evolve into a costly
war that serves only to enrich lawyers. 	
    "They could beat their brains out in litigation," Cutrow
says. "At the end of the day they can't possibly win. Even if
they win, economically they lose because of the amount of money
they spent getting there." 	
    Not all troubles are presented in lawsuits, and even
well-intending parents can't always avoid them. 	
    New York financial adviser Elle Kaplan recalls clients who
tried to nip in the bud potential conflicts with their children.
They favored one of two siblings in their will, and included a
clause promising disinheritance to anyone who brought a lawsuit
over the inheritance. So, while there was no lawsuit, there was
plenty of ill feeling, and a pair of brothers who no longer
speak with each other.	
    	
    YOU DON'T HAVE TO BE RICH	
    While significant amounts of wealth can prolong a battle, it
isn't a prerequisite; experts say they see siblings who aren't
rich sue each other all the time.	
    "There's always rivalry among siblings," Kaplan says. It's
important to have dialogue before death so the descendants
aren't left to sort out plans they either don't understand or
inadvertently pit one against another, she said.	
    When Leona Helmsley died in 2007 and left $12 million to her
dog and nothing to two of her grandchildren, it was an example
of how family troubles during life can foster further
complications after death, Kaplan said.  	
    The grandchildren went to court, and a judge agreed that
Helmsley was not of sound mind when she made the last version of
her will, and each was awarded $6 million. The dog's share was
trimmed to $2 million. (The dog, a Maltese named Trouble, died
in 2010.) The bulk of Helmsley's estate went to her charitable
trust.	
    Let that be a lesson: A little estate planning and
conversation can help a family avoid fighting like cats and dogs
-- or fighting with cats or dogs over an inheritance.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below