Mediation Uncovers Solutions to Sensitive Family and Estate Conflicts

October 1, 2015
Written by Lynne C. Halem

No family can brag that they never disagree. Conflicts are inherent in all relationships,regardless of the bonds of love that hold the family unit intact.  Indeed conflict, in and of itself, is not necessarily bad.  Many students of human behavior maintain that arguments can strengthen relationships, provided, of course, that the method of “fighting” is fair and focused on resolution.

Mediation, as a process, offers one method of dealing with conflict that individuals and/or groups are unable or unwilling to resolve themselves.

In the arena of family disputes, mediators are increasingly being approached to facilitate the resolution of conflict associated with will and estate issues.  Mainly, conflict arises after the death of a parent.

Consider this story of two brothers, Joseph and Oliver Simpson:

Joseph had never married. He had moved from Massachusetts to Colorado after college, but returned home five years later when his employer, declared bankruptcy and closed.  To give himself time to find a job and decide where to live, he moved in with his mother, who had been living alone since his father had died.  As often happens, this temporary arrangement became permanent.

Oliver, the younger brother, had never left Massachusetts.  He married after college and together with his wife and 2 daughters, ages 15 and 17, lived 45 minutes from Mom’s house.

The Simpsons were a close family.  Joe had a strong relationship with Oliver, as well as with his sister-in-law Arlene, and his nieces.  Mom was glad to have Joe live with her. It was good to have someone to cook dinner for, not to mention his help with household tasks.  Generally, relations were amicable in the Simpson family– that is, until Mom had a heart attack at age 80 and died.

An outdated will divided assets “equally” – what did that actually mean?

Mom’s will, which had never been changed since her husband’s death, divided her estate “equally” between her two sons.  The Will did not contain any other specifics.  There were no bequests for any other individuals.  The simple intention of the Will was that Mom’s estate of around $600,000, was to be shared equally between her two sons.  In practice however, the actual division of assets was more complicated, starting with Mom’s house, which had a value of approximately $500,000.

Joe wanted to continue to live in the house.  He understood his brother’s stake in the real estate, but felt that the last five years of living in the house kind of gave him a right to remain, not to be uprooted at the time of a family tragedy. He offered to maintain the real estate and be responsible for all associated costs.

Perhaps predictably, Oliver had a different view.  Joe had no immediate family that would be inconvenienced by leaving the house.  Moreover, he, Oliver, could really use the money from the sale of the house to help finance his daughters’ college education, a major financial outlay that he and Arlene faced in the very near future.

Tension built up between the brothers.  For a few months neither spoke to the other.  Then Oliver sent an email to Joe, informing him that he was going to call in three real estate brokers to estimate the fair market value of the house.  Joe was at first hurt, then angry.  How dare Oliver take such an aggressive stance?  Why had he not first discussed his plan with him?   Whys and wherefores plagued the thoughts and actions of both brothers.  They were stuck.

Arlene, who certainly had a stake in the outcome of this dispute, was still distant enough from the siblings’ history and emotional ties to be able to see the possible destruction ahead if the conflict between the brothers continued to escalate.  It was thus Arlene who proposed mediation.  Neither brother was familiar with the process, but both wanted some way, other than legal intervention, to resolve their dispute.  They agreed eagerly to enter mediation.

With the help of the mediator, a financial portrayal of the estate was compiled by the brothers.

Oliver’s arrangement for securing the fair market value of the home, previously seen by Joe as an aggressive affront, was now deemed to be a necessary step for gathering information.

Next came an exploration of each brother’s needs and concerns, followed by structuring different solution strategies. Each “solution” was further dissected through an examination of its financial and personal implications. The objective was to have both brothers engage in this problem-solving approach by analyzing the impact of each so-called solution on individual family members and, by extension, on the family as a whole.

The end result was for Joseph to remain in the house subject to the following terms:

• From this estate with present net equity estimated at $600,000 of which, $100,000 was in cash, Oliver would receive, up front, $75,000 and $25,000 would be put into an account for funding, upon mutual agreement, repairs to the house, if and when they occurred.  Any repair cost in excess of this funding would be shared equally between the brothers. The upfront cash was provided to help Oliver with college financing.
• Joe was responsible for payments of home insurance and real estate taxes, as well as for routine maintenance and upkeep based on a detailed listing of agreed upon responsibilities—financial and physical—for Joe, as the resident of the home.
• Joe would have the right to secure (in his name and Oliver’s) a home equity line of $75,000 and to draw up to said amount provided he paid the interest-only payments when due. Withdrawal was intended to provide each brother with almost equivalent amounts of cash.  Obviously Joe’s share came with a surcharge, but then, he had the “privilege” of living in the house and Oliver was deferring his full fifty percent interest in his mother’s estate.
• Joe could remain in the house, subject to the terms above, as long as he so chose.  In the event that he did not move, and thus the house was not sold until his death, one hundred percent of his interest in the house, approximately  $212,500 at its present value, would be willed by him, to his nieces.  As such, any remaining college loans, would at some time in the future be paid by the girls’ inheritance.

The mediated agreement was embraced by Joseph and Oliver as fair and workable.

Each believed that their needs and concerns had been heard and that they had engaged in an informed and reasonable search for a solution.   Other families might well have devised a different settlement.  The key and most important point is that the siblings came to an “agreement.”

In the case of the Simpson family, siblings averted an escalating battle, were able to reach a fair agreement, and as a result, maintained their relationship.  They were proud that they engaged productively in a problem- solving process and the result was not just that they settled their dispute, but they each benefitted from the solution.

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