Is Equality the Best Policy in Estate Planning?

| Dec 16, 2020 | Directives, estate and tax planning, Estate Planning

At Geyer Law, we understand that estate planning is more a matter of thinking through decisions than of preparing documents, and, as we explained in detail in last week’s blog post, when it comes to selecting “Power of Attorney” agents to take care of your affairs when you are not able to do so yourself, it’s not about your children’s birth order, but about who has the experience, background and temperament to represent your wishes the best.

Professor Gary Bauer of Western Michigan University discusses another important issue in estate planning – whether or not to treat heirs equally. In an interview with AARP Bulletin’s Sarah Mahoney, Bauer voiced an interesting opinion: Either treat all children the same or prepare for blowback. “Leaving more to one child or leaving one out entirely almost guarantees dissent and challenges later, “Bauer states. Feelings are hurt and balloon into legal hearings after death.”  In the event that you’re still resolved to create an imbalance, talk that decision over with your children now, he advises.

Not everyone agrees.  In fact, as Carla Fried writes in considerable.com, “More parents are leaving unequal inheritances to their adult kids. What’s more, a research study from Merrill Lynch Bank of America found that two-thirds of Americans believe that an uneven split might be the right way to go. Not that this kind of uneven division doesn’t lead to ugly sibling fights, jealousy and meltdowns, the author admits. 

There’s a difference, Investopedia reminds readers, “between leaving an equal inheritance, where each child receives the same amount, and an equitable inheritance, where each child receives what’s fair, given his or her circumstances”. Factors to consider include:

  • Has each child received similar support in the past? (Perhaps you’ve already given one child considerably more money because of a special need?)
  • Is each child mentally and emotionally capable and responsible?
  • Does the inheritance include real estate and other tangible assets whose dollar value must be determined?
  • Has one child been acting as your caregiver, and you want to compensate them for lost time and wages?
  • Are any of your children receiving support from another parent (blended families)?

Sibling rivalry is as old as Man (think Cain and Abel). At Rebecca W. Geyer & Associates, we aim to help clients carefully evaluate their unique circumstances – including their unique adult offspring – and come up with a thoughtful plan for leaving everyone with pleasant thoughts and memories.

– by Rebecca W. Geyer

 

 

 –  by Ronnie of the Rebecca W. Geyer blog team