'Parents want their kids not to fight about money after they are gone'

"What do you want to happen in the future? What are your thoughts? What are your needs?

Israeli shekels (photo credit: Courtesy)
Israeli shekels
(photo credit: Courtesy)

“Making sure your assets are properly distributed after your death is simple if you plan ahead,” said Adv. Ohad Hoffman, founding partner at Hoffman & Friedenberg, a boutique law office that specializes in the practice areas of Family and Inheritance law in Israel. “Most people don’t know how easy it is to write a will and prevent problems that can cause fights between their kids for years. It can be just a matter of a half-hour and a small amount of money to get everything set properly.”

Ahead of the International Day of Older Persons, a holiday established by the United Nations and observed on October 1, Hoffman discussed the steps that elderly people can take to put their assets in order. The goal of the day is to raise awareness about issues affecting the elderly, as well as appreciating their contributions to society.

There are several main things a person can do to prepare for end-of-life issues regarding health and money, Hoffman said. The first is arranging for power of attorney (POA), in which power is assigned to someone to make decisions on their behalf.  “if you are mentally healthy, you can sign a POA,” Hoffman said. “But there is a new element in Israeli law called continuous power of attorney that you can sign now, when you are healthy, giving someone POA in the event that you are not mentally sound. That way, instead of a guardian being appointed by the court in the event that you can no longer make decisions for yourself, you can decide now who your guardian will be.”

Almost any lawyer can set up a continuous power of attorney, and prices for doing so are controlled by the government, Hoffman said.

After death, the only way to dictate how your assets will be divided is with a will. “The POA only allows someone to make decisions for you when you are alive,” Hoffman stressed. “Once you are dead, you must have a will written in the way required by law, written by a family lawyer.

Using the wrong kind of lawyer can create all sorts of problems in the family courts, which deal with inheritance matters, so make sure you use a qualified family lawyer.

 Adv. Ohad Hoffman (credit: Yael Cohen) Adv. Ohad Hoffman (credit: Yael Cohen)

After death, the Inheritance Registrar at the Justice Ministry will check the will for probate, in a process similar to how it is done in the US or UK.”

Hoffman offered some advice based on the most common mistakes people make. “Mistake number one is giving too much info to too many people,” he said. “If you have a lot of assets, you don’t owe it to anyone to tell them what you have. If you have a grandchild asking how much you have, you don’t have to answer them. Otherwise, after you die, that grandchild can start making trouble, with conspiracy theories, trying to subpoena banks, and fighting with uncles and siblings. Leave everyone in the dark.”

Second, Hoffman said, if you decide that you do want to rely on one of your family members for inheritance matters, you should sit with them and share your thoughts as clearly as possible. “What do you want to happen in the future? What are your thoughts? What are your needs? Explain everything, and go together to a lawyer and write everything down. Document everything with explanations and with a witness. Otherwise, there can be very uncomfortable situations with the siblings after death.”

Another common mistake is that children often entrust their parents to foreign health workers and then ignore their day-to-day activities. “If you won’t be taking care of your parents in person, you must check their bank accounts every day and understand what is happening in the house,” Hoffman said.

“Some workers are given credit cards for buying groceries, and it is very common to see that they are making cash withdrawals on the side.

 “I had one wealthy client in Herzliya whose kids all lived in the US, and the worker they brought in did all sorts of criminal things, including buying a Mercedes for his brother. If you are paying attention, you can stop this in real-time, but if you fall asleep on the job, it will be too late to do anything by the time you wake up.”

Ultimately, there are two main sources of problems, Hoffman said. “People don’t know their rights, and they don’t understand how easy it is to set up a will or POA. Meanwhile, the younger generation doesn’t pay attention to what is happening with their parents until it is too late. It is very easy to fix these with a short meeting and a bit of effort.”  

At the end of the day, Hoffman said, most parents just want the inheritance process to go peacefully. “Nearly all people who come into my office tell me they have only one concern; they don’t want kids to fight about their money after they are gone. And the only way to avoid that is to prepare in advance.”