Most estate plans are written with a hopeful picture in mind. The house, the business or the portfolio stays in the family and keeps everyone connected for years to come. A parent passing something down to their kids usually expects them to find a way to share it. When it moves down another generation to the grandkids, that arrangement often starts to break down.
Christina Wing wrote about this for The Wall Street Journal in a personal finance essay titled “Who Gets the Bulk of Grandma’s Estate? Here’s How to Solve the ‘Cousin Problem.’” She starts with Brown-Forman, the maker of Jack Daniel’s. More than 150 years after its founding, it’s controlled by over 100 family members, a lot of them cousins, and the family has been publicly divided over where the business should go and whether to sell.
Every family’s story is different, but Christina sees this pattern often in her advisory work. Brothers and sisters have a lifetime of fights and reconciliations behind them, and that gives them some trust to draw on. Cousins often don’t. Families are smaller now, relatives are spread out, and the weddings and holidays that once brought cousins together happen less once the older generation is gone. But once cousins inherit something together, they’re in business with each other. Christina is candid that her own family fits this pattern. Her kids and her brother’s kids live on opposite sides of the country, and some years they don’t see each other at all.
She lays out three ways families can get ahead of it:
Start building cousin relationships early. A fifth-generation family Christina works with in Saudi Arabia begins preparing its 144 cousins at 15, teaching them the history of the family and its business along with personal finance, and later how their council and board operate. A Brazilian family covers the cost of a trip every other year so its 40 cousins, many now living abroad, can spend time together.
Expect that certain heirs will put in more, and some will own more. Splitting things evenly doesn’t guarantee anyone feels it was fair. If one cousin runs the company for decades and the rest just receive checks, that gap matters. Christina suggests families consider holding back a portion of ownership to reward the people who end up doing the most. Family branches also grow at different rates, so over time one grandchild might own a quarter of the business while a cousin owns a much smaller share. She calls this the “branch-line problem.”
Recognize that cousins’ finances may look nothing alike. Coming from the same family money doesn’t mean everyone lands in the same place. One cousin may build a fortune while another struggles to cover their kids’ college costs. Those gaps make everyday decisions, like whether to rent out a vacation property or reinvest profits instead of paying dividends, much more emotional.
Christina’s bottom line is that families can’t have these conversations without trust, and that trust has to be built long before anyone inherits anything. Families that do this work early will still disagree, but they’ll be disagreeing with people they know.
Read the full article in The Wall Street Journal (link below).
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Christina has also written a book about the hard conversations families tend to avoid. Learn more about Unspeakable: The Taboo Topics We Avoid and How to Talk About Them at www.christinawing.com/book.
