How to diffuse a wealth-threatening family feud

How to diffuse a wealth-threatening family feud

How to diffuse a wealth-threatening family feud

Money can’t buy happiness; even some of the wealthiest households have their share of internal discord and dysfunction. Feelings of resentment, rebellion, and rivalry can erode family fortunes and businesses, so the stewards of that wealth could see it all go to waste — unless someone steps in.

“You may be able to help your clients by suggesting mediation and finding a good mediator,” wrote conflict resolution specialist Carolyn Rosenblatt on WealthManagement.com.

Rosenblatt stressed that mediation is not therapy; the aim isn’t to change anyone or to resolve personal and relationship issues that have likely been brewing for years. Instead, it’s to guide the family toward some rules of engagement to reach agreements on specific issues.

“For example, if the parties decide to sell a family business, mediation can help reach agreements as to a time frame, who will direct the sale and what method will be used to liquidate the assets,” she said. “Focus isn’t on who’s right or wrong. It’s on the tasks at hand.”

When it comes to mediation, the interests of multiple parties must be considered, but one side shouldn’t be favoured over another. An effective mediator should be trained for the job, Rosenblatt asserted, and they should have the right personality to endure the potentially brutal and volatile process of resolving conflicts.

Depending on the number of parties and the complexity of the conflict, Rosenblatt said family mediations could take a few hours or a few sessions; most are done in person, though some are conducted through Skype or by phone.

Another benefit of family mediation, she said, is that it helps participants clearly express themselves. With a mediator guiding the discussion, each party can identify what they want and arrive at their own solutions.

“Generally, this isn’t something they can do on their own,” Rosenblatt said. “They’re too caught up in resentment, anger, fear or other feelings.”

 

Related stories:
The cost of divorce: how advisors can protect assets
The pitfalls that lead to squandered fortunes
 


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