Infighting over control of family assets is far from uncommon no matter the value of the holdings. History is replete with examples of siblings, step-relatives, and other engaged in estate battles over property that has little to no value. Of course, that is not to say that the possibility a disagreement increases with the value of the property. Things can get especially sticky when things like family businesses, land holdings, and other tangible and valuable items are at issue. Many of these assets may have been within a family for decades (or generations) and fighting over control is quite predictable, especially when estate planning is inadequate.
For example, the Wealth Strategist Journal reported recently on the battled over control of supposedly the largest underground series of caves in the eastern United States–Luray Caverns. The caverns are incredibly popular, and it is reportedly the third most visited cave in the country. Considering its popularity, the location has grown into a significant business for the family which owns it. A Washington Post story notes how the cave has been open to the public for nearly 130 years. At $24 for a one-hour tour, the business of showing the cave is estimated to bring in about $30 million annually.
Unfortunately, control over the caverns is apparently is disarray as the family in charge seems perpetually mired in controversy. The Post story explains how two of the family siblings recently sued two others in an attempt to disqualify them for participating in a family trust. In total, control of the caverns rests with six children bore of a family patriarch who died in 2010 at the age of 87.
The disputes are varied, including disagreements about managements of the operations and claims of unfair “golden parachute” retirement packages. On top of that, the parents had “no contest” clauses in their wills (added secretly late in life) which theoretically disinherit any beneficiary who challenges the terms of the will. That no contest clause is what has spurred the most recent litigation.
Many have pointed to the situation as a textbook example of how things can go awry quickly with largest families and complex assets. One observers explained, “Family businesses can be quite successful, he said, but the managing and intermingling of blood and commerce, insiders and outsiders, requires a deft hand, planning and enormous amounts of trust.”
As in this case, parents are often able to keep rivalry and infighting in check while still alive. But all of that often comes apart after a passing. Without incredibly clear, unambiguous, and open estate planning, sibling discord can explode when parents are gone.