You Take the Money, I Want the Boogie Board

Seniors who want to prevent arguments among their heirs should focus more on who gets the china than the cash: When it comes to inheritance, emotion-laden personal items are five times more likely to create family conflict than money, a new study says.

Issues involving the fulfillment of parents’ last wishes also are five times more likely to trigger fights among heirs than questions of financial inheritance, according to the study released Wednesday.

“We are about to see the biggest transfer of wealth in history, and we found that everyone was focused on the wrong thing,” said Ken Dychtwald, president of Age Wave, a market research firm that helped design the study for Allianz Life Insurance.

“Many people wrongly assume the most important issue is money. While it isn’t trivial, it’s way down the list,” he said.

The study is one of many in recent years that have centered on the massive inheritance -- as much as $41 trillion, by some estimates -- today’s generation of seniors could leave to heirs.

But rather than concentrate on what heirs might do with any windfall, Dychtwald said his firm chose to look at what was most important to both seniors and baby boomers in inheritance and legacy issues.

Interviews with more than 2,600 seniors and boomers in spring showed that more than three-quarters of both age groups rated “values and life lessons” as the most important legacy they could either give or receive, the study said.

Financial assets and real estate were listed as “very important” by just 10% of boomers.

The study suggested that families also would do better to talk in detail, in advance, about who gets which personal items -- even some items that may, at first, seem inconsequential.

Heirs whose parents were deceased had argued relatively little about the distribution of financial assets, the study said. Just 3% said financial assets were the “greatest source of conflict” in inheritance proceedings.

By contrast, 15% said the greatest source of conflict was “distribution of personal possessions of emotional value.” Another 15% listed “fulfilling the last wishes and instructions” of their parents.

Estate planners had mixed reactions to the study’s findings.

“I see plenty of fighting about cash in my practice,” said Leah Bishop, a trusts and estate lawyer with O’Melveny & Myers in Century City. But she said some of the stickiest battles are over personal possessions.

“I’ve had $10-million estates, where everyone is fighting over Mom’s grand piano,” she said. “Everybody is getting enough to buy their own. But they’ll spend more than the item is worth fighting over it.”

Ann Perry, author of “The Wise Inheritor” (Broadway Books, 2003), agreed, saying that the worst estate horror stories she found when researching the book were about personal items.

“People will go to court over a 25-cent Christmas ornament or a used boogie board,” Perry said. “What they are fighting over is not the financial value, but who is carrying on the legacy.”

“All dollars are equal,” added Fred Lowary, a wills and trusts attorney in Anaheim. “You divide them up and that’s that. But I always tell my clients to write out a letter saying who gets the watch, and the rings and the shotgun. Otherwise its like “Zorba the Greek” -- the heirs figure whoever runs through the house first gets what they want. It’s amazing how much people can fight over who gets the family photographs.”

Another finding in the Age Wave study was that 68% of baby boomers and 71% of seniors said they had a high comfort level discussing inheritance issues. Yet only 29% of boomers and 31% of seniors have actually had thorough discussions of what Age Wave said are the four pillars of legacy: values and life lessons, instructions and wishes to be fulfilled, personal possessions and financial assets or real estate.

Dychtwald said the firm discovered when it was assembling focus groups to help design study questions that, when asked initially about inheritance, “everybody clammed up. That word spoke about money and greed and all sorts of things that no one wanted to talk about.”

When the firm changed the question to ask about “legacies,” the floodgates opened, he said.

“People are dying to talk about this, but nobody had been asking the right questions,” Dychtwald said.

“What has been talked about is how much money is going to be transferred” from seniors to boomers, said Mark Zesbaugh, chief executive of Allianz Life in Minneapolis. “The big ‘a-ha’ moment for us was finding out that it is not about that.” The lesson, he said, was that families should take time to “sit down and discuss the things that matter.”