Parents often bend over backwards to treat their children equally so as not to imply that one child is favored over any other. This is particularly true when parents make estate planning decisions – specifically, how their assets will be divided when they die.
Bequeathing unequal inheritances risks leaving some children feeling they have not been treated fairly. Then again, distributing everything equally can cause hard feelings and family disputes as well.
Who defines ‘fair?’
Colleen Carcone, a director of wealth planning strategies at TIAA, told the personal finance website NerdWallet that “fair” can mean different things to different people. There are many reasons why parents may leave more to some children than others.
- Certain children may have received less financial assistance than others earlier in life.
- The children may have varying degrees of success and some need the inheritance more.
- One child may have provided years of care for one or both parents during their final years.
Of course, the decision regarding what to leave to each child is ultimately up to the parents. Carcone says it helps to have candid discussions with your children about your estate plans while you are developing them. You may discover that something you feared would be divisive is not. One child who has enjoyed greater career success than others may want his or her siblings to receive greater shares of the parents’ estate.
Talk through specific assets
It’s also a good idea to address specific assets with children. For example, it can be tricky determining how to treat a family summer home in a will. Some children may wish to retain ownership, while others may live far away and don’t feel they can get much use from it. An estate planning lawyer can help you devise a strategy where those children who wish to share ownership of a summer home do so, while others may be compensated otherwise.
Whatever their decisions, Carcone advises parents to leave a detailed letter explaining why they did what they did with their estate. “Nobody wants to leave a legacy of family disharmony,” she says.