Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 614

How to avoid inheritance fights

Wasn’t it fascinating to watch the papal conclave over recent weeks? The producers of the movie Conclave must have been counting their blessings, as viewers were drawn to their fictionalised version just as the real event was unfolding.

It made me think that many families go through their own kind of conclave after the death of a parent. There might be a Will appointing an executor — hopefully — but what if that person is no longer suitable, perhaps due to ill health, estrangement, or simply being overwhelmed?

The papal conclave lasted just two days and involved 133 highly educated and experienced Cardinals (two were unwell). Throngs packed St Peter’s Square, and millions watched online. A family conclave may be far less public — but it can be just as fraught. Someone has to arrange the funeral, draft the death notice, and write the eulogy — often amid simmering tensions. These decisions can be especially sensitive in blended or second families, where loyalties and histories collide.

Then comes the hard stuff: dividing sentimental items like photos or heirlooms, clearing out the family home, deciding whether to sell or retain investments — all while grieving. And many of these decisions have tax or Centrelink consequences. Adult children, who may never have worked together on anything, are suddenly forced into joint decision-making under stress. It’s a perfect storm.

I recently spoke to Donal Griffin of Legacy Law in Sydney — a highly experienced estate lawyer — and he made an excellent point: “These difficult times are usually better when there are no surprises, and the family has done a fire drill. That way they understand the roles, expectations, and plan. It might seem awkward to organise, but it’s far better done when emotions are lower. And the parent can even have input into what happens after they’ve gone.”

Donal has written a book I highly recommend called Be A Better Ancestor, which is a powerful reminder that our lives are just one link in a much longer chain. The idea is to leave things better than we found them — to anticipate problems and normalise difficult conversations. As Donal puts it: “My clients get great peace of mind from facing up to these inevitable events. Hiding from them just creates more fear. I encourage families to work together while everyone is still alive and alert — and where necessary, bring in an independent executor or informal mediator to head off conflict. No one likes surprises here.”

It reminded me of my own book, Wills, Death & Taxes Made Simple, which covers all of this in plain English — from powers of attorney and advance health directives to who pays tax on death benefits. One of the book’s strongest messages is that planning ahead avoids problems later. The tools are all there — testamentary trusts, super nominations, tax planning — but the real key is communication. A beautifully written Will can be a disaster if no one knows why decisions were made or if beneficiaries feel blindsided. As I often say, the best estate plan is one where everyone knows what to expect.

That’s why I like Donal’s idea of a ‘trial conclave’ — a family meeting where key issues are discussed while everyone is still calm and clear-headed. It might involve appointing someone other than a child as executor or agreeing in advance what happens to the family home. Yes, it may feel awkward at first, but it can bring surprising relief. The deceased may even want to explain their reasoning while they’re still around, which can avoid bitter arguments later.

The other benefit is that it allows time to identify practical hurdles: maybe one sibling lives overseas, another has health issues, or there’s a child with special needs who’ll require ongoing support. These are the kinds of situations where a thoughtful estate plan — and a bit of rehearsal — can make all the difference.

So, my advice is this: have a trial conclave before the real one. It’s not morbid — it’s smart. That way, when the time comes, your family can be present to honour your life, not consumed by conflict. After all, don’t we all hope to rest in peace — and leave peace behind us?

 

Noel Whittaker is the author of Making Money Made Simple and numerous other books on personal finance. His advice is general in nature and readers should seek their own professional advice before making any financial decisions. Email: noel@noelwhittaker.com.au.

 

19 Comments
Chris
June 06, 2025

Would you include daughter/son in laws in these meetings or just your children?

David
June 06, 2025

Almost never

Martin
June 06, 2025

I strongly recommend this approach if you want minimum drama's over an estate. I am the eldest of 12 children (10 sisters, 1 brother) and was the executor of my mothers estate. In a family of this size trying to get agreement on anything was like trying to herd a large group of cats. Knowing the potential disagreements that may arise I convened a get together with my siblings before Mum died and we discussed the topic of who would like what when she died. There were the odd disagreement or two but we managed to get them resolved in a fairly calm way. It was all very civilised and we all felt good about it after the event. A few wines helped!. I then went to Mum and told her what we had done and what had been agreed amongst us. She was delighted knowing full well there would be no disagreements regarding the estate upon her death. The key message I would like to pass on is to have the discussion beforehand and definitely do not have any partners involved, just the children/beneficiaries of the estate.

Eva
June 06, 2025

Yes I agree with you, only children on discussion, no partners involved.
Children/siblings were brought up together, have emotional connection whereas partners were come into picture
later. You can discuss with your partner beforehand to let her/him know what will be going on.

Denise
June 06, 2025

And if you don't plan to leave much to family they will then start to neglect you even worse now that they know they won't inherit anything. Not a good idea to spill the beans on your will before you die for that reason

Graham W
June 05, 2025

A family conclave is a great idea as long as the inheritors understand the tax implications re what they are to receive.
A share portfolio, a holiday house and a family home, each ostensibly worth say $800, 000, could have different and sometimes extremely high capital gains tax consequences. So, getting a tax accountant to check it out would appear to be a good investment in many situations. In my case, my wife and I are in our seventies and in process of transferring all of our financial assets to a family trust. Our two children will take over the trust when we lose capacity or die. No CGT and no arguments. Our residence or RAD will be handled in our will and generally have no hidden tax imposts.

lyn
June 06, 2025

Graham, apologies in advance for asking & understand if you choose not to disclose, any rough estimate on cost to set up trust by solicitor, not cost of running trust but set up cost? I've had very wide apart quotes.

Graham W
June 06, 2025

Hello Lyn. I had my accountant set up the trust for around $1,800. It has a company as trustee, my wife and i are the only shareholders. Two family members are directors with us. The most important role in the trust is the position as Appointer. That person decides who is the Trustee of the trust. This is where you need advice from your accountant and your lawyer. Setting up the trust and corporate trustee was easy but my wife and I and two children have been put through the wringer by banks and the share trading company setting up the new trust's accounts.. Despite using the same bank and share guys that we have in our SMSF it has taken nearly two months. This makes us and our family happy that it is getting done before we are unable.

lyn
June 06, 2025

Graham W, Many, many thanks for being frank. It's nice to have place to acquire knowledge /comparison one wouldn't otherwise have and others' experience/opinion. The cost seems reasonable compared to what quoted so good guide, thank you. Think your story will prompt to pursue what I gave up on.
See a problem at my last sunset due to Life experience being executor of 3 problematic wills so wish to avoid problem for children but wish to be fair, but in death they may feel not been fair so wish to protect wishes of what I feel is fair re some in Qld & some NSW re home prices and one has paraplegic sibling -in -law whom they adore that may limit earning ability in future when current Carer parent dies and could affect 1 high-achieving child's life in peak high - earning years in order to support partner who may wish to care for disabled sibling in law. Search for how to do comes from a caring place.
Did you find via Trust that you were able to be fair if a need to be fair ? Again, apologies if too personal so understand if you don't comment.
Hope my headstone only says: Fairness was Paramount Perhaps I should pre-order!

David
June 06, 2025

Some additional points to consider.

One trust, two families is a possible recipe for disaster. Different needs, one wants money the other doesn’t, tax implication of ‘equal’ distributions will have different impacts, whether to have a corporate beneficiary or not. I haven’t even started about what one child’s spouse thinks vs the other child’s spouse.

Further by the estate not owning the assets a testamentary trust is ruled out which means grandchildren under 18 can’t be paid income and taxed at adult rates.

You also bring forward CGT, possibly for decades, which would otherwise not have to be paid. This reduction in capital and return reduces your longer term estate value.

I would much prefer the will have a CGT equalisation clause. Even for retained assets (with a cost base) an offset can be provided at the estate level prior to distributions to account for the tax. Further the will can provide for two TT’s (at the discretion of each beneficiary individually at the time of death) which means additional tax planning opportunities if there are grand children. Really importantly you avoid the one trust two kids which provides for decades of potential conflict not just at the time death.

Secondly this allows better CGT management as you have multiple beneficiaries to pay the CGT not just mum n dad which may reduce the overall tax bill. This is achieved by placing higher cgt assets into a trust and selling there with multiple beneficiaries rather than just one or both parents paying the tax now.

Lastly you won’t pay set up costs now and annual compliance of the trust. This only occurs after the second parent passes.

I don’t know the full circumstances of your family and your goals but on the surface better and less expensive options are available for consideration based on the information provided.

David Williams
June 05, 2025

Really useful thanks Noel. The other comments so far are really useful too. Proper longevity planning introduces the key aspects of Estate Planning as essential to good planning. It provides a framework for the wide variety of interactions that should take place while people are still reasonably active and capably engaged.

Cynical One
June 05, 2025

Great points Noel

The biggest problem with estates is when one of the people entitled to make a claim under a will threatens to do so. In Queensland this includes stepchildren.

This claim can occur even after a family conclave.

The costs of these proceedings are usually met by the estate (i.e. the claimant does not foot the full bill even if they lose) and it is usually cheaper to pay them out.
These claims used not to be a significant problem but there are many lawyers prepared to run even the most sketchy case.

The problem is exacerbated by the conceit by some judges who like nothing more than to impose their view of fairness instead of that of the careful testator. They take the view that children, however badly they behaved towards the deceased whilst the testator was alive, have an “entitlement” and that a testator who decided to leave “enough to do something but not enough to do nothing” to a child (and the rest to a charity) is acting unreasonably.

My own lawyer has advised me that by far the greatest drivers of these claims are the spouses of the children.

That is a case of pick your poison: unhappy spouse with whom you live or unhappy siblings and wider family who will lose money if you claim.

lyn
June 06, 2025

Cynical One, your 3rd from last Para: did your lawyer suggest how judges may decide that way oron what basis decisions made? My solicitor quoted case he knew of in the practice, a 3rd sibling who 'left' the family 25 years prior to death of parent with no further contact, some benefit in Will specified but contested by that sibling & awarded equal 1/3 share, of course court costs borne by estate. He suggested if uneqal share to siblings that reasons be stated in the Will as part of will-making, eg. if some siblings had private education and others did not, some given their first car and others not or contribution to home deposit and others not.

Cynical Too
June 06, 2025

I agree on the conceit of some judges and particularly the lefties. I was involved as an executor in such a case . Our barrister was all for going to trial but a noted leftie and feminist was appointed to the Court. The advice then was to settle at all costs which we did.

On the issue of costs against the estate it is now more prevalent to have courts in Queensland award costs against unsuccessful parties particularly if they have shown little inclination to settle or have some bad history with the deceased. Judges are getting a bit sick of spurious claims although many more claims are successful compared to when I started in the law over 50 years ago. Back then claims were often made by the children of farmers who were treated as unpaid labour and left little in the will .It was not uncommon for farmers to leave the farm to some cousin who was also a farmer. The wife would be left a life interest in a house in the nearest town.

lyn
June 06, 2025

Cynical Too, thanks for sharing your experience as it's a minefield. It is worrisome judges don't take same approach on cases as you indicated. Spurious claims and your example of children of farmers excluded I understand but not when testator has tried to be fair and their wish overturned. Do you have opinion of leaving reasons why share of estate is calculated, stated in Will? Have you known that to work?
Understand your farmer example as my mother taken out of boarding school at 14 in Depression to work family business & to help at home as maid no longer afforded in a busy household trying to stay afloat & to keep older & younger sisters at school and university. Her father's Will left problem re 2 sisters who book-ended Depression so had further education---professional careers & single. Mother left widow at 38 with 3 children and no edfucation to earn a decent living but inherited a property to make up lack of education but a problem stemmed not from no equal share of property but the Estate trust bore expenses of that property, exacerbated as a life clause for his youngest by many years single sister to live in the property as she too had been denied education due to WW1 & worked in business and home & she died at 99! Thus why I know as lived through it to adulthood. None of 3 sisters ever happy about it but they learned to keep business separate from relationships with each other. My point being, with best intentions in the world, things go wrong.

Cynical Too
June 06, 2025

Lyn
It might be useful to leave a statement with the will but I would always recommend going to a solicitor to make a will, and not do it yourself and definitely not with the Public Trustee. The latter might prepare a will without fee but may charge both legal fees and commission to the estate. A competent solicitor would always be able to advise how to deal in advance with potential claims. I am 18 years retired from law so I am out of date and can not advise in a legal sense. I have made my will and EPA with a lawyer. I do not do my own will as I follow that old adage, He who is his own lawyer has a fool for a client.

Patrick
June 05, 2025

My mother called us four children together before she died for a meeting around the dining room table. Over a couple of bottles of wine, she made us divvy up all her possessions (house, furniture, jewellery, shares, art, cutlery, everything). We traded and swapped items between us, depending on our individual preferences and circumstances - and it was all written down and a photocopy provided to each of us. We didn't try to get exact valuations for each item, because most were of sentimental value rather than $ value and we had a reasonably good idea of what things were worth. An important element was that it was only us children involved, no spouses were there to complicate things. When she died, there were no arguments. We just inherited what had been agreed. It was a good way to do it.

Johns
June 05, 2025

One of the biggest issue with estate planning is "blended families"

It is fair that assets of one spouse passes to the other on death, but then what stops the surviving spouse from changing their will so that their children get everything and their deceased spouse's children nothing?

If the first spouse to die gives his children the estate (even with right to occupy to old home to the surviving spouse) the spouse can say "insufficient provision" and challenge the deceased person's will and will probably get the house outright a significant amount of the remainder of the estate

Retirement Dr
June 05, 2025

You make some excellent points Noel. It makes sense to plan ahead but I wouldn't be expecting it to be all beers and skittles. Some of the more controversial issues will be difficult to resolve at any time. The bigger problem is finding a lawyer who understands the financial implications of the will and how it will impact the beneficiaries. Whilst a right to occupancy for example, might work for one family member, it might create an albatross for another - especially when the family home is left to multiple family members. My experience is a lot of back and forth between financial advisers and lawyers to find what works.

 

Leave a Comment:

RELATED ARTICLES

The gentle art of death cleaning

Estate planning made simple, Part II

Planning to make your money last forever

banner

Most viewed in recent weeks

Australian house prices close in on world record

Sydney is set to become the world’s most expensive city for housing over the next 12 months, a new report shows. Our other major cities aren’t far behind unless there are major changes to improve housing affordability.

The case for the $3 million super tax

The Government's proposed tax has copped a lot of flack though I think it's a reasonable approach to improve the long-term sustainability of superannuation and the retirement income system. Here’s why.

Tariffs are a smokescreen to Trump's real endgame

Behind market volatility and tariff threats lies a deeper strategy. Trump’s real goal isn’t trade reform but managing America's massive debts, preserving bond market confidence, and preparing for potential QE.

Getting rich vs staying rich

Strategies to get rich versus stay rich are markedly different. Here is a look at the five main ways to get rich, including through work, business, investing and luck, as well as those that preserve wealth.

The super tax and the defined benefits scandal

Australia's superannuation inequities date back to poor decisions made by Parliament two decades ago. If super for the wealthy needs resetting, so too does the defined benefits schemes for our public servants.

CBA, AUSTRAC and our Orwellian privacy laws

Imagine receiving an email from your bank demanding to know if you keep cash at home and threatening to freeze your accounts if you don't respond in seven days. This happened to me and it raises disturbing questions. 

Latest Updates

SMSF strategies

Meg on SMSFs: Withdrawing assets ahead of the $3m super tax

The super tax has caused an almighty scuffle, but for SMSFs impacted by the proposed tax, a big question remains: what should they do now? Here are ideas for those wanting to withdraw money from their SMSF.

Superannuation

The huge cost of super tax concessions

The current net annual cost of superannuation tax subsidies is around $40 billion, growing to more than $110 billion by 2060. These subsidies have always been bad policy, representing a waste of taxpayers' money.

Planning

How to avoid inheritance fights

Inspired by the papal conclave, this explores how families can avoid post-death drama through honest conversations, better planning, and trial runs - so there are no surprises when it really matters.

Superannuation

Super contribution splitting

Super contribution splitting allows couples to divide before-tax contributions to super between spouses, maximizing savings. It’s not for everyone, but in the right circumstances, it can be a smart strategy worth exploring.

Economy

Trump vs Powell: Who will blink first?

The US economy faces an unprecedented clash in leadership styles, but the President and Fed Chair could both take a lesson from the other. Not least because the fiscal and monetary authorities need to work together.

Gold

Credit cuts, rising risks, and the case for gold

Shares trade at steep valuations despite higher risks of a recession. Amid doubts that a 60/40 portfolio can still provide enough protection through times of market stress, gold's record shines bright.

Investment strategies

Buffett acolyte warns passive investors of mediocre future returns

While Chris Bloomstan doesn't have the track record of his hero, it's impressive nonetheless. And he's recently warned that today has uncanny resemblances to the 1990s tech bubble and US returns are likely to be disappointing.

Sponsors

Alliances

© 2025 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.