The death of a parent is a trying time even in the best of circumstances. Tracy in Wisconsin is coping with the added burden of a squabble that's broken out among her siblings over their late father's will. And she's looking ways to resolve it.
...A week after my father was buried, the sale of a house (he owned half) was completed. The executor (my sister) then informed us that during my father's last days he supposedly signed a note leaving my other sister, his caretaker and co-executor, a much larger sum of money for taking care of him than we had verbally agreed upon, and that the executor had already cut a check for her. The rest of us have not yet to see any documents.... I would like to resolve this in some was without having to go to court — where can I find more information?
Tracy O., Menomonee Falls, Wisc.
We can't give legal advice, but having gone through this ourselves, we can say that the loss of a parent can, on occasion, bring out the worst in siblings. At the very time you need the parent to step in and help resolve the tension, their absence is all the more painful.
Depending on how your father's will is written, the executor can have a great deal of discretion over how assets are divvied up. In many cases, difficulties arise over the disposition of personal effects, especially those for which multiple siblings have a strong emotional attachment. Something as simple as Dad's worthless rocking chair can suddenly cast an unexpected spell as a family heirloom with a powerful connection to multiple childhoods.
When financial assets are involved, however, a will is supposed to spell out clearly how they're handled. If the will states that property is to be divided equally, that's fairly easy to do. If there are sizable assets, it's a good idea to get tax expert involved. In any case, you're entitled to see the full accounting of the estate when it's completed, including the fees paid to the co-executors, attorneys, accountants, etc.
If there's a codicil attached to the will — a change superceding the original instructions on dividing up assets — it's got to be executed legally, just as the original will was. Usually, that means it's signed and witnessed. In any case, it has to be presented for all beneficiaries to review. And eventually, the final disposition of an estate has to be approved by a probate court.
So one approach would be to find out where the estate is being probated and write a letter to that court's clerk saying you don't agree with how the will is being handled. You'll probably be notified of a hearing anyway, but it doesn't hurt to do this on your own. If you take this route, you probably should have your own lawyer to help you sort through the process.
But before you go to court, have you contacted the attorney who drew up your late father's will? That attorney generally bills the estate for his or her time -- which means it won't cost you anything. That attorney is also likely to be the most knowledgeable about the terms of the will and any codicils that may be out there. If the attorney says your sisters are on solid legal ground, you could still go to the hearing try to challenge what they've done. But you should check with your own attorney first to see what you're up against.
You may also be able to resolve this by approaching your sister, explaining that you understand that you're entitled to see an accounting of the estate -- and the note she claims your father signed. Explain that you understand that, while she has certain powers as co-executor, the process is overseen by a probate court. And explain that you'd like to work things out with her, but that you're prepared to voice your objections in court if she won't make a good faith effort to sort things out. (She may not be aware that her actions are governed by the probate process.)
The last thing you want to do in the middle of grieving for your family's loss is to dig in and fight over your father's estate. But if you don't address your differences now, it may be harder to reconcile with your siblings later.
When and why do stocks split?
-- Robert W., Florida
In theory, if the stock market is working efficiently, a stock split should have no impact on that stock's long-term performance -- any more than breaking a $20 into two $10s will make your money go further. When a stock splits "two-for-one," for example, each holder gets two shares for every share they've already got. But the price is cut in half, so the value of your overall holding stays the same.
Still, there's no such thing as a perfect market. We haven't seen any conclusive research on the topic one way or another. But there's a body of conventional wisdom out there that splitting a stock helps boost it's performance for reasons unrelated to the math on the day of the split.
Some investors believe that a stock split is a sign that the company sees the share price going higher -- which means it's a good stock to buy. But you could also make the case that the company is reacting to a high price by splitting, which means the stock may be coming to the end of a run-up.
Companies are also said to like to splitting their stock when it gets "expensive" (say over $100) because they figure more people can afford to buy the lower-priced shares, which increases demand, which -- all other things being equal -- helps lift the price.
One often-cited benefit of this is that, with more shares out there, large funds and other "institutional" investors maybe more interested. The theory is that these big investors don't like companies with a small number of shares outstanding - because when they move in our out of a stock, their action by itself will move the price against them. (Since neither the dollar amount nor the percentage stake in the company changes, we're not sure how much weight to give this theory.)
Over the long term, of course, a stock that keeps splitting is obviously a winner. But that doesn't prove that splitting caused the stock to go up. It just means stocks that keep going up split more than those that don't. Warren Buffet, whose Berkshire Hathaway stock has done pretty well over the years, is famous for not buying into the stock split theory. (At this writing, the stock traded at $91,490, a gain of $310 for the day.)
And, while there may be some evidence that stocks tend to jump right after a split, it's not clear that the gain holds up over the long run. It could be that the short-term boost is the result of the split -- as investors who believe splits are a good sign of a higher move jump into the stock.
If you come across any research with more conclusive results, let us know. Until then, we're inclined to put stock splits in the category of a neutral event that has no predictive value of long-term performance.
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