It is easy and simple to treat your children equally in an estate plan, but that may not be fair.
It can be a difficult task in estate planning to figure out how to divide an estate unequally but fairly between children, according to the Wills, Trusts & Estates Prof Blog in “Dividing Your Wealth Among Your Children.”
Most of the time dividing the estate equally is a fair way to divide a parent’s estate and one that the children accept. That does not always work, however, because, as every parent eventually learns, treating children fairly does not always mean treating them equally. That holds true in estate planning.
Adult children can wind up in very different life circumstances for a variety of reasons. For example, if one child became wealthy after receiving a large gift from his parents to start a business, it might not be fair to treat that child the same in an estate plan as another child who went into public interest work.
The biggest problem is figuring out how to make the unequal division without causing any of the children to dispute the estate. Trusts are extraordinarily helpful in these situations, since they are much more difficult to challenge.
Parents can create a trust with an independent trustee and give the trustee the power to make distributions to the children based on their circumstances and needs. It is also important that parents who are leaving unequal inheritances for their children talk to the children and let them know the reasons for doing so.
An estate planning attorney can advise you, if you need to create an estate plan with unequal inheritances that are actually fair.
Reference: Wills, Trusts & Estates Prof Blog (May 5, 2017) “Dividing Your Wealth Among Your Children.”
