In the book The Charles Schwab Guide to Finances After 50, author Carrie Schwab-Pomerantz poses the following scenario: “I’m confused about how to divide my estate between my children, who have different needs and financial resources. Is it best to divide it into equal parts?”
This question is directed at people who have children at different levels of personal and financial success, according to a recent Millionaire Corner’s article titled “Dividing the Estate: Treat Your Children Well.”It suggests that the parent in this scenario may want to do more for the struggling child than for the successful one as far as designating heirs for their estate assets.
The original explains that it makes sense for parents to treat their children equally. While one may think about providing extra assistance to a child with fewer resources, or for a child with special needs, you need to do so cautiously. The article also reminds us that the status of the children can change over time, making a strong argument for equal distribution.
However, if you do decide to divide your estate unequally, it’s a good idea to explain your plan to all of your children right away—be honest about any of your concerns for each of them.
If you choose an unequal distribution, you might consider giving more money to the children who need it the most, and the more successful children could have some of the family heirlooms with emotional value and maybe a high resale value. To make sure your estate wishes are executed as you want, only an estate planning attorney can make certain everything is legally binding and proper.
Some people choose adult children to serve as executor or trustee for the estate, and the article warns against this. The size of the estate and the complexity of assets are two things to consider, along with the emotional stability of the family members who will be benefiting from the estate.
When one person in a family is given authority or power over others, there’s always a chance problems could arise. Children may all get along now—but could that change when money is involved or issues of control arise? It might.
When choosing an heir to execute the estate, you should think about whether that person is going to be paid from the estate for the services he or she provides. Once you make a decision, you should talk to your children and be open about your estate plan. This includes what’s in it for each of them and why you’ve chosen a specific person. They’ll be happy to know that you trust all of them with this and that they’ll honor your wishes without discord.
We can assist you in starting your estate planning by attending one of our free estate planning Workshops. Please contact us at 360-975-7770 or at nicolle@nwlegacylaw.com to sign up and learn more!
Reference: Millionaire Corner (March 12, 2015) “Dividing the Estate: Treat Your Children Well”
