Fair or equal can be distinct and valid estate planning goals.
Most parents do not intend to create or fuel conflict among their children.
Listening to children argue about the size of their piece of cake compared to the serving given to their siblings can be both frustrating and exhausting.
Unfortunately, such competitive comparisons do not disappear simply because children have entered adulthood.
To avoid family conflict, many parents opt to distribute equal inheritances to their children.
This is the most common and safest approach to avoid family conflict.
For example, some children have a strong work ethic, while others do not.
Life choices, including education, employment versus entrepreneurship, delayed gratification versus consumer consumption, and even marital relationships, all contribute to life outcomes.
Should the success of one child be grounds to tip the scales in favor of those who made less successful life choices?
Despite these intentions, equal and fair are not always the same.
Circumstances such as whether one child is serving as a caregiver for an aging parent, one child has already received greater financial support during their lifetime, or one child is struggling financially make different inheritance amounts a fairer choice.
Balancing fairness with the need to avoid resentment can be challenging, but not impossible.
Equal slices of an inheritance may not necessarily be fair.
Equal inheritances mean the estate will be divided and distributed in equal portions among heirs.
Fairness is more nuanced, as it involves tying inheritances to factors such as need, effort, and sacrifice.
Consider what you might do if one of your children quits his or her job to serve as your full-time caregiver.
Because this individual sacrificed financially to support you in a time of need, you might reward or compensate this child with a larger inheritance.
Another example involves a child with extra needs due to financial hardship or disability.
If one child has received greater financial support for college tuition or a house down payment, you may desire to offset these lifetime gifts by leaving more to another child.
By working with an experienced estate planning attorney, you can take these actions legally and with thoughtful intention to minimize the chance of future conflicts.
Many families find themselves in situations where different inheritance amounts to heirs is a legitimate strategy.
What are these reasons?
Parents may choose to give unequal inheritances when one child served as a long-term caregiver, when they want to account for previous lifetime gifts, when one child has more financial need, when a child with a disability requires continual support, or when there has been an estrangement.
Although these are all legitimate causes for unequal distributions, you should approach your estate planning thoughtfully.
While your values should be reflected in your estate plan, you will also need to address how your heirs might respond to your decisions.
Clear communication of your reasoning can minimize perceptions of punishment or favoritism.
Let me repeat: Clear communication of your reasoning can minimize perceptions of punishment or favoritism.
Initiating conversations about your inheritance goals can be uncomfortable, whether you choose to prioritize fair or equal distributions.
Despite the discomfort, sharing honestly about the reasoning for your decisions can prevent estate battles or lasting emotional wounds.
Although you do not need to share all the details of your plan, it is essential to prioritize promoting an understanding of your reasons.
Including a letter of intent with your last will and testament or revocable living trust can provide clarity for your motivations amid estate settlement.
Some families prefer to simply have a family meeting to share and answer questions about their estate plan.
Parents who are more transparent are more likely to have family wishes honored while preserving family relationships.
It is not enough to simply want to have an estate plan prioritizing fairness over equality.
You will need estate planning documents to support your wishes.
Most Americans lack the knowledge or ability to do this on their own.
An experienced estate planning attorney can help you customize your last will and testament or revocable living trust to allow for unique distributions, include language in your documents to support the choice of unequal inheritances, use retirement accounts or life insurance to balance inheritances, and protect caregivers or heirs with special needs.
When your estate plan is outdated, invalid, or informal, your loved ones can be left both confused and embittered.
Yikes!
Whether you prioritize fair or equal in your estate planning goals, you can request a consultation with our Overland Park estate planning law firm to create a plan to meet your needs.
Equal amounts do not always reflect what is fair when contributions, personal needs, and special circumstances are considered.
Open communication about your estate planning goals and reasons can shield against misunderstandings among loved ones.
Having a clear and legally valid estate plan is key to protecting your wishes.
If an adult child has served as your caregiver or if you have an adult child with special needs, strategies are available to provide necessary supports while minimizing the risk of resentment or estate battles.
Working with an experienced estate planning attorney is vital to preserving your wishes and preventing family conflict.
Trust me, I have seen this play out many, many times over my 32 years as an estate planning attorney.
As with much of life and our relationships, clear communication is key.
This post is for informational purposes only and does not provide legal advice. You should contact an attorney for advice concerning any particular issue or problem. Nothing herein creates an attorney-client relationship between Harvest Law KC and the reader.
Reference: Merrill Wealth Management (September 2024) "Fair, equal and equitable: A guide for families navigating gifts, estate planning and inheritance"
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