Estate planning can be a detailed and complicated topic and many times equal might not necessarily mean fair. As parents or grandparents, our clients want to treat all their children with equal intent and fairness, but sometimes that intent might not mean an equal or same inheritance. Equal and fair can be very different things depending on the estate plan.
So, What is Fair?
If you are drafting a living trust your attorney will tell you that treating your children fairly does mean they each receive equal inheritances. Living trusts are not a one-size-fits-all document and a person can customize how their children will receive their inheritances.
Sometimes an unequal inheritance can be the fair inheritance. There are many circumstances and things to consider when trying to divide your assets between children or other family members. Once such example is based on your children’s income. If one child has a family and earns a modest living but does struggle financially, fair might mean leaving that child more money than your other offspring who makes six figures, has a spouse earning the same amount, and they do not have children.
There are many examples where unequal means fair. You may want to leave more to a child that works in the public services arena or volunteers for a living. Or you may want to leave more for a child that helped care for you, or for younger children still in the earlier stages of adulthood, or for a child with special needs.
There are countless reasons where it would be perfectly fair to leave a larger inheritance to one child over the other.
Distribution of Inheritances
Another issue to think about is deciding when your children will receive their inheritances, and again, your choices do not have to be the same for each child. You can decide to distribute inheritances in a lump sum, installments, or keep them in a trust until a child comes of age. If you have a child in their early 20s and another in their 40s with a spouse and children, you may want to distribute the other child’s inheritance in a lump sum and the younger one in installments.
What To Know
Many of our clients do not give outright inheritances and instead keep their assets in a trust for their children. The trustee will make distributions based on the guidelines you provided to your attorney when drafting the trust. Keeping those assets in a trust will help protect against creditors, bankruptcies, law suites, irresponsible spending or anything else that can put the inheritance at risk.
Contact Us For a FREE Consultation Today!
When you are ready to start thinking about inheritances and protecting your assets for the future, the first step is to contact an expert estate planning attorney. Elder Law Services takes pride in helping families and our team will walk you through every step of the process. Contact us at (800) 403-6078 for a FREE consultation. We look forward to work with you.