Most parents understand the value of a well-crafted estate plan. These legal documents help families process death and come together during a challenging time. A thorough estate plan helps reassure families, letting them know that, even in death, their parents are looking after them.
Sometimes though, a will can cause conflict and strife among families. Some heirs may see their inheritance as unfair and might contest the will. How should parents divide the inheritance when “equal” does not always mean “fair?”
Different methods of dividing an inheritance
Because a vast number of differences exist in family structure, culture, location and size, no “one-size-fits-all” estate plan exists. The same goes for splitting an inheritance for families with multiple heirs. Most division plans do fall into four major categories:
- Equal-share division: Many parents will choose to divide their estate equally, dollar-for-dollar, among heirs. Though this may work for many families, some heirs may feel they deserve more or resent a wealthy sibling for receiving an equal share.
- Evaluating need: Some heirs may need more than others, and parents may wish to help in the will. Unequal shares can create division in a family without proper communication, and some heirs may see a smaller share as punishment.
- With gifts deducted: Some heirs may request early access to their inheritance, receiving a smaller amount when the will goes into effect. If heirs do not expect a deduction, they may feel slighted.
- Family-business first: Some heirs may have taken over the family business. Some parents may leave more money to the owners to help with business operations.
Colleen Carcone works at the Teacher’s Insurance and Annuity Association (TIAA), a leading provider of financial services. She suggests that the families who draft the best estate plans are the ones that do it together. She recommends that families develop estate plans together to help manage expectations.
Find a lawyer to help
Families who wish to draft equitable wills or estate plans can find success with a local lawyer familiar with family law. An attorney can draft documents, work with court officials and assist a family with settling the estate when the time comes.