Early in The Big House, his acclaimed memoir about his family’s summer house on Cape Cod, George Howe Colt reveals that the family is selling it after several generations of ownership. “I can hardly believe it as I write these words,” he notes, observing that the “financial issues are entwined with emotional issues far more formidable.” The book explores these emotional issues—issues that make up what Ruth Kennedy Sudduth, director of residential services at Landvest, a high-end real estate brokerage, calls “emotional assets.” When faced with the prospect of how to divide assets in a will, emotional assets can be tricky territory.

Emotional assets, or “Big House assets,” as Sudduth dubs them, are actual assets that have emotional strings attached. The emotional asset could be a house or farm or piece of land you want conserved (and don’t necessarily need to own), or even a piece of jewelry or family portrait. It is these emotional assets (which do not necessarily have the same emotional pull for everybody) that stir family battles over inheritances—oftentimes far more than money itself. And it is also these emotions—and perhaps an unwillingness to deal with them—that makes dividing an estate problematic and causes people to put off attending to their estate and writing a will or trust.

It is, however, so important to have a will and/or trust in place as soon as possible, because you want to make your passing as easy as possible for your loved ones. Delaying the process may save you some emotional turmoil now. However, in the face of the unexpected, you may leave your family with an even larger knot to untangle. However difficult it may feel to process the emotional assets you own, and what to do with them, we hope this article can help you find some solutions with your family.

Know the True Worth of Your Assets

You may be thinking this is pretty obvious, yet that’s not necessarily true. Sudduth says this is “not an insubstantial exercise,” pointing out that it’s often difficult to figure out what a property or piece of art is worth financially—or who really cares about it, or why they care about it. “Sometimes the facts are complicated,” she says.

True enough.

For example, we know of a gentleman who perchance was able to buy a portrait of his great-great-great-grandfather—at auction. Who put it up for sale? None other than his brother, who claimed he had no idea his sibling wanted it. Had he known, he would have gifted it to his brother. As implausible as this sounds, there may some truth to it—something better understood if you know the delicious love story (a.k.a. “complicated facts”) behind it.  Let’s call the gentleman Bob.

Bob was named after his mother’s favorite cousin, who owned the portrait for years. The cousin introduced Bob to his lifelong addiction to exercise, taking him to places like the West Indies. He was Bob’s role model, and he called Bob the “General”—nicknaming him after the subject of the portrait, an esteemed ancestor.

When Bob was 17, he fell in love with a 15-year-old Catholic girl. His cousin disapproved, and Bob was summoned to Boston for indoctrination and encouraged to disavow his love. Instead, he married her. As a result, though, lost his status as the most favored heir. The cousin no longer called him the General, and he disinherited Bob from receiving family heirlooms—including the portrait of his great-great-grandfather, for whom he was nicknamed.

Although Bob reconciled with his estranged cousin on his cousin’s deathbed, he did not see the portrait again until years later, when he saw it at the auction. To him, reclaiming the portrait meant reclaiming a formational piece of his childhood.

So How Do You Appraise the Worth of an Emotional Asset?

The answer isn’t always cut and dry, yet it starts with communication. Be willing to open discussions with your family members about things that are sentimental to them. Collect your family stories through the years, so that you may have a better understanding of what certain things mean to your family members. This isn’t a quick process; it’s one that’s cultivated over years (or even generations). Yet, it has great potential to bring your family closer. Not only do you get an idea of what your loved ones value, but you also get the opportunity to understand them on a deeper level.

In Kim Butler’s book, Perpetual Wealth, she and co-author Kate Phillips talk about the value of family retreats. Not only are these important for building your family’s generational wealth monetarily, but it is also the perfect time to connect with your family and collect these stories. We encourage families who practice the family retreat to actually appoint someone to record these stories or have individuals write their own. This helps the whole family foster closeness. You can read more of our strategies for family retreats in the book.

How to Divide Assets in a Will

1. Develop a Process for Talking About the Elephant in the Room

In Sudduth’s workshop, one attendee came from a family of relatively new wealth in which the parents did not want to talk about what they owned. This is not that unusual. As it so often happens, acknowledging that the family has wealth is hard. The attitude was, “Yes, we have it, but we don’t want to talk about it.”

While there is no way to rush such a discussion, Sudduth also says it’s important that you work toward a process for having that conversation. But, she adds, give it “some breathing space.”

“The family process may take years to evolve,” she says, noting that people cannot always talk about things. We’re all operating at a different phase in life, and we all tend to handle those phases differently. If a family member is going through a difficult time, for example, they may respond well to distraction. Or, they may wish to bury their head in their problems.

So how do you navigate a way to talk about it when the parents aren’t ready? They could, after all, pass on at any time. Answer: Keep in mind that your parents do not have to talk about your inheritance to deal with it—and they don’t have to deal with it even if you talk about it. “It’s a conversation that doesn’t have to go anywhere,” Sudduth says.

A good first step is to talk about why it’s so difficult to talk about.

For her workshop attendees, the most compelling idea was to bring in a third party to facilitate the conversation. It’s important, however, that this third party is not there to sell a product. Instead, request that they simply be there to mediate. If you bring in the estate planner, insurance agent, or lawyer before the family is ready, no one is going to listen. Rather than trying to sell a solution, the idea is for the third party to simply facilitate a conversation about the process and gauge people’s sentiments.

“It is about respecting where people are at,” Sudduth explains, “and almost inventorying that before you even start inventorying stuff.”

2. Consider Emotional Currency—Not Just Financial Currency

The idea here is to be conscious of and attentive to the emotional aspect of certain assets. Sudduth suggests not just counting up what things are worth financially, yet also what they are worth emotionally to different heirs.

“It doesn’t have to be equal financially for it to be fair,” she says. “It can be quite unequal financially and be very fair.”

The example she cites is a situation where conserving a property can be far more important than getting the maximum dollar for it. Perhaps a family member wants to conserve the property, and another just wants money. Sometimes, doing the right thing with an asset is more valuable to someone in your family than getting top dollar.

Consider the story of what happened to the portrait of James Roosevelt, the father of President Theodore Roosevelt. It landed in the hands of a dealer, who was directed to contact one of the grandchildren. When the dealer brought it over, he recalled in a letter, he could see the grandson’s “unabated excitement.”

After selling the piece (“I probably could have commanded a fortune for this piece, but it was one of those moments for me where the profit was secondary to the placement of the object,”), they carried the picture into a boardroom at the back of the building where there was a wall covered with Roosevelt family portraits. In the place behind his chair at the head of a conference table was a photo of this very painting. A family member in need of money during the Depression had sold it—and the grandson had been searching for it for 50 years.

3. The Process of Dividing Assets Must Reflect Family Values

If the process for dividing assets does not mirror the values of the family, there could be trouble later on—i.e., a lawsuit. And a process that works for one family may be totally wrong for another. This is why it’s critical to come together as a family to establish your values (as discussed in the book, Perpetual Wealth.)

Sudduth recalls one family that chose to draw straws as they split up belongings in an estate. In fact, it’s a common process. However, those who continually draw the short straw will always feel cheated. It may technically be a “fair” solution, yet it feels incredibly unfair to the losers, and that makes an impact.

It may have been better for this particular family to have created more structure around the process of drawing straws. For example, the person who wins has to sit out of a designated number of rounds. If there are a few things that everyone in the family cares about, consider sharing it between heirs over a number of years. In the right situation, it could be a way of keeping the family together, Sudduth shares. “You have this process of rotating this ring, and it’s kind of a ceremony. But it depends on the family. Some people would just roll their eyes, and others would want the ritual.”

4. Use Life Insurance to Create Balance

When you have emotional assets that are hard to divide evenly, life insurance can make things much easier. Perhaps one heir wants the jewelry collection, the sailboat, or the summer cabin, while their sibling couldn’t care less about the asset. The sibling can then be compensated for their “half” with cash from an insurance policy. In cases like this, everyone tends to have a good outcome.

This can also be a way to support someone who highly desires an emotional asset, yet still wants some inheritance. Not to mention, life insurance is great for figuring out how to divide assets in a will that are a bit more significant (for example, the generational home). Life insurance may help heirs band together to keep a home that they otherwise could not afford to keep up. Or, some of that money could be paid to heirs that don’t inherit the home. These are just a few examples of what can be done. Ultimately, life insurance is a great way to ensure that both emotionally and financially, all heirs are happy, and relationships in the family stay strong.

How Can We Help?

Of course, life insurance is also a fitting solution for dividing financial assets as well as emotional assets! It can optimize an estate while minimizing taxes, allowing to you pass on more to your loved ones and less to Uncle Sam. Contact us today if we can provide you with:

• greater cash flow in your retirement years
• a referral for an estate planning attorney
• life insurance with a long-term-care rider
• financial advice to help your dollars work harder
• an estimate for a convertible term or whole life insurance.

At Prosperity Thinkers, we are here to help! And if you’re interested in learning more before you make any moves, we invite you to sign up for our Prosperity Action Pack. You’ll get some of the best education we offer, straight to your inbox, so you can learn at your own pace.