This originally aired on the Catholic Faith Network’s show CFN Live: https://youtu.be/R7x2k6Tob-c

Should you leave assets equally to your children?

The easy answer is YES, but it really depends on one’s desires and the circumstances of one’s situation.

Dividing up one’s estate among offspring can be a tricky business.

There are many situations in which the obvious option—an equal division of assets among children—is the right choice. However, giving each child an identical inheritance might not make sense in some families.

As estate planning attorneys point out, there is a difference between leaving an equal inheritance, where each child receives the same amount, and an equitable inheritance, where each child receives what’s fair, given their circumstances.

So, one should consider: when does it make sense to leave each of your children with the same inheritance, and when does a different arrangement make more sense? And how might each choice affect sibling harmony.

Equal Inheritance vs Equitable Inheritance

The starting point is deciding upon how much you want to leave each of your children and then in what manner.

Key Takeaways

• Equal distribution can also avoid family conflict over fairness or favoritism.
• Equal distribution, however, may not actually be an equitable distribution, especially when some children have been favored financially in the past over others, or some are in financial straits.

What if a parent wants to leave assets to their children in unequal amounts?

There may be several reasons why a parent may want to leave their children with different inheritances.

For example, if one of the children:

• is disabled or has special needs,
• has acted as your caregiver for an extended period,
• has received more money or less money from you,
• is financially better off than their siblings or
• participates in the family business.

What are some issues if you leave assets in unequal amounts to your children?

If you decide not to divide your assets equally among your children, understand that you are putting your plans and your children at risk of going through a lawsuit.

How significant is this risk, and how likely is it that the result will be a different division of assets than the one you desired? Children can sue to contest a will, but with careful estate planning, you can help mitigate challenges.

The first step is to draft your Will with the assistance of an experienced estate planning attorney while you’re of sound mind and memory and without undue influence from one of your children.

There are basically two grounds for attack by a child.

“Undue influence” which means that one of your other children believes—or at least thinks it can be proved in court—that you were manipulated during the process of creating your Will. As a result, that child contends, you expressed wishes that you otherwise wouldn’t have or that weren’t really what you wanted. You won’t be there to defend yourself against such a claim, so you need to make sure no one can successfully argue it.

“Lack of capacity,” another way a Will can be challenged, means that you didn’t understand what you were doing when you created or changed your W perhaps because of your age or because a physical or mental illness had eroded your ability to make sound decisions. A child could also try to argue that your Will is not valid because of fraud or because your signature wasn’t witnessed.

How can you protect your wishes?

There are ways to minimize the chances of a less-favored child contesting your will in court, as well as ways to minimize that child’s chances of winning if they do.

A no-contest clause paired with at least some nominal gift can create a disincentive to challenge. A non-contestability clause is, basically, language in your will stating that any inheritor who takes your will to court forfeits any bequests. That’s where the nominal gift comes in for the clause to be effective, your child must have something to lose. You will need to leave the less-favored child enough that they likely have more to gain by keeping quiet than by going to court.

It is an unpalatable option, to be sure, but it might mean the best chance of keeping your will intact. The enforceability of these clauses varies by state, however, so check your state’s laws before considering this option.

Estate-planning experts say other ways to avoid challenges to your will include the following:

• No Contest Provision
• Using a Revocable Living Trust
• Excluding all children from the will-writing process to invalidate claims of undue influence.
• Discussing your Will with each child to avoid surprises and explain your reasoning.

It may end up that there is a settlement among the children which in the end alters your desires stated under your Will.

What is the bottom line?

The most important thing to remember when dividing up an inheritance is that it is your money, and you have a right to do with it what you choose.

That said, an equal inheritance makes the most sense when any gifts or financial support you have given your children throughout your life have been minimal or substantially equal, and when there is not a situation in which one child has provided most of the custodial care for an older parent.

When there is actual or perceived inequality, the likelihood of someone looking for legal remedies increases substantially. You must decide how significant that risk is given your children’s temperaments, their relationships with one another, and whether any risk in leaving an unequal inheritance is worth what you’re trying to accomplish. Planning your estate carefully may not be easy, but it is essential.

We hope you found this article helpful. Contact our office today at 1 (800) 680-1717 and schedule an appointment to discuss what makes sense for you and your loved ones.